Labor gives green light to income tax cuts

TAX relief for 10 million Australians next year will come to fruition after Labor agreed to back the first round of the Turnbull Government’s income tax cuts.

TAX relief for 10 million Australians next year will come to fruition after Labor agreed to back the first round of the Turnbull Government’s income tax cuts.

But Opposition Leader Bill Shorten is shaping for an election fight over a further round of cuts “two or three elections down the track” in 2024.

Mr Shorten is expected to use tonight’s Budget reply to propose similar middle-­income tax cuts while sharpening attacks on Prime Minister Malcolm Turnbull’s continued “top end of town” support.

“All the worst of Turnbull’s cuts are still in this Budget — the cuts to schools, the cuts to hospitals, and the cuts to pensioners,” he said. “Every Budget is about choices. Yet again, Turnbull has chosen the top end of town — and he’s making you pay for it.”

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Opposition Leader Bill Shorten is shaping for an election fight over a further round of cuts ‘two or three elections down the track’ in 2024. Picture: Kym Smith

About 4.4 million Australians will get relief of $530 in the form of a lump sum through their tax return next year, with another 6 million to also to have the burden on their hip-pocket eased.

But the government will try to pass a Bill, introduced to federal parliament on Wednesday, that combines the immediate cuts with a future tax cut in 2023 and 2024 with a $140 billion package.

The latter reform will remove the entire 37 per cent tax bracket, which has substantial flow-on benefits for high-­income earners.

Treasurer Scott Morrison said the seven-year tax plan was affordable but took the cost-of-living pressures off families. Picture Kym Smith

Mr Shorten said Mr Turnbull “will not be around to have to face up to keeping that promise”.

“They want us to have a debate about a possible tax cut in the year 2024. That’s two or three elections down the track,” he said.

Treasurer Scott Morrison said the seven-year tax plan was affordable but took the cost-of-living pressures off families. He said workers would know that if they put in extra effort, they would get ­rewarded. “On top of that, we are acting to remove the impact of bracket creep and simplify the tax system in this country,” Mr Morrison said. “That means that 94 per cent of working Australians paying taxes in this country will face a marginal tax rate of no higher than 32.5c in the dollar.”

Meanwhile, Australians will be automatically shifted off their brand-name drugs on to generic medicines under a $335 million cost-saving move in the Budget.

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