Government MPs press PM to cut tax in fight against bracket creep

WORKERS could be in line for election-year tax cuts as MPs pressure Prime Minister Malcolm Turnbull to help battle the bracket creep for struggling households.

WORKERS could be in line for election-year tax cuts as MPs pressure Prime Minister Malcolm Turnbull to help struggling households.

The Herald Sun can reveal a growing group of MPs are calling for income tax cuts, amid renewed warnings about bracket creep forcing up taxes for middle-class Australians. Some are even pushing the government to delay the rest of its company tax cuts package — which has little pro­spect of parliamentary support — to pay for income tax relief.

Their concerns come after the Parliamentary Budget ­Office revealed more than 1.6 million Australians would be slugged higher taxes in the next five years.

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Prime Minister Malcolm Turnbull and Treasurer Scott Morrison.

Victorian MP Tim Wilson and Tasmanian senator Eric Abetz are among those leading the charge, with both wanting tax cuts to be included in next year’s Budget.

A senior government source said it was more likely to happen in an election year — which the Prime Minister hopes will be in 2019.

“We’ve got some of them through — and that’s a huge bonus for small and medium businesses — but if we’re not going to get it through we should be delivering relief for families as soon as we can,” the source said.

Treasurer Scott Morrison said today: “Wherever I can cut taxes, I will.”

Mr Wilson said comprehensive reform was needed to a tax system “stuck in the 1950s” which placed an “increasing burden on working people through bracket creep”.

Senator Abetz also express­ed concern about bracket creep, saying tax cuts would be “well received by the ­electorate”.

Goldstein MP Tim Wilson is pushing for the cuts. Picture: Kym Smith

Some MPs argue tax cuts would ease the pain of a planned rise in the Medicare Levy to fund the National Disability Insurance Scheme.

Mr Morrison said the government already had “significant runs on the board” by adjusting the middle-income tax bracket and scrapping the deficit levy.

“This is what Coalition governments should do,” he said.

Treasury Secretary John Fraser recently said bracket creep was “a means of impo­sing higher taxes by stealth”.

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Mr Morrison said he would continue to seek parliamentary support to extend company tax cuts to all businesses so they could “expand, create jobs and give Australians a well-earned pay rise”.

The PBO said the Coali­tion’s promised return to surplus in 2020-21 relied heavily on income tax revenue, while Deloitte Access Economics found the government’s total tax take would increase at the fastest rate since 2000 in the next two years.

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