2018 Federal Budget: Morrison promises household ‘relief’ with $10 tax cut

THE Federal Government will give low income earners a $530 lump-sum sweetener in their tax returns this year — and a boost for retiring Baby Boomers.

THE Federal Government will give low income earners a $530 lump-sum sweetener in their tax returns this year — and a boost for retiring Baby Boomers.

Seven News reports Treasurer Scott Morrison plans to spend more than $500 million in a cash splash for those earning under $90,000 each year — and Baby Boomers headed into retirement.

The $530 “tax offset” will be a lump sum instead of a weekly tax cut. It will be paid out as part of their tax return later this year. And the third-tier tax bracket of 32.5c in the dollar will be lifted from those earning $87,000 annually to $90,000.

But one of the biggest winners will be the electorally important Baby Boomer population.

Some $5 billions dollars is expected to be spent on a new incentives scheme allowing them to earn more longer — without impacting their pension. Retirees will also be able to supplement their incomes through reverse-equity loans using the family home as equity.

7 News can tonight reveal that millions of workers will get a handout of more than $500 in this evening’s Federal Budget. @Riley7News #auspol #7News pic.twitter.com/kC9GE1j2Ng

— 7 News Melbourne (@7NewsMelbourne) May 8, 2018

COSTELLO’S COMMENT A BLOW FOR TURNBULL

BILL Shorten has thrown former Treasurer Peter Costello’s comments about the ongoing budget deficit distater in Malcolm Turnbull’s face.

Mr Costello last night predicted he would die before the nation’s finances returned to a healthy state.

“Former Treasurer Peter Costello reckons he’ll be dead before the government pays back its debt,” Mr Shorten said.

“Will the Prime Minister confirm that his government record includes gross debt increasing to a record half a trillion dollars, net debt doubling and net debt as a proportion of the economy is growing more rapidly than any advanced economy in the world?”

But Mr Turnbull hit back, saying he would not be lectured by the Labor Party.

“We’re not going to take lectures from the Labor Party on debt and deficit,” Mr Turnbull said.

The heated exchange followed Scott Morrison’s unveiling of tax breaks of about $10 a week for workers on low and middle incomes tonight in a budget he vows will reduce pressure on households.

It’s understood the Treasurer’s tax package will lift the third-highest tax bracket from $87,000 to $90,000 and almost double the Low Income Tax Offset.

Seven West Media reports the package, worth $4 billion a year, will deliver tax relief to about 92 per cent of working Australians.

Ahead of his budget speech to Parliament tonight, Mr Morrison told reporters in Canberra his economic plan was about “improving the opportunities for all Australians to live in a stronger economy”.

“It’s a plan for lower taxes and for reducing the pressure on households,” he said.

“It’s a plan to back business to create more jobs ... It’s a plan to guarantee the essential services that Australians rely on every day.

“It’s a plan to keep Australians safe as Coalition governments know how to do. And it’s a plan, as always, that the Government lives within its means.”

Australia's Treasurer Scott Morrison. Picture: AP

The centrepiece of Mr Morrison’s 2018 budget will be the tax package that will reportedly extend the low income tax offset for workers earning up to $125,000 a year, up from $66,667.

It’s expected the change, to be introduced next year, will deliver a boost of about $520 to $530 a year to workers on low and middle incomes.

Seven West Media reports it will be paid on a sliding scale with bigger increases for those with lower pay.

Meanwhile, the Treasurer’s plan to lift the 32.5 per cent tax bracket from $87,000 to $90,000 will reportedly deliver tax relief to an extra 179,000 Australians.

Pensioners, big business, and big city commuters are also expected to be key winners in the budget.

It’s expected the government will announce a $5 billion package for seniors.

It will also include the government’s plan to give a massive tax cut to big business by reducing the corporate tax rate from 30 to 25 per cent by 2026-17.

A multi-billion dollar road and rail infrastructure package will also be announced.

Deputy Leader of the Opposition Tanya Plibersek says the tax cuts represent “a hamburger ... or a milkshake”. Picture: AAP

Treasurer Morrison this morning dismissed the concerns of Australia’s longest serving Treasurer, Peter Costello, who last night predicted he would die before the nation’s financial situation returned to a healthy state.

He also called for government spending to be slashed by at least $18 billion a year.

“I encourage my friend and mentor to tune in tonight and I think he’ll be pleased with what he sees,” Mr Morrison said this morning.

Deputy Labor Leader Tanya Plibersek has scoffed at the size of the tax cuts for workers on low and middle incomes, saying it wouldn’t even be “a hamburger and a milkshake” reduction.

“You’ll have to take your pick — a hamburger or a milkshake,” Ms Plibersek told reporters in Canberra.

The budget will be handed down at 7.30pm tonight.

News Corp will cover the Treasurer’s speech live from Parliament House.

Originally published as 2018 Federal Budget: Morrison promises household ‘relief’ with $10 tax cut