‘You don’t go to the tax supermarket’

GOING to the ‘tax supermarket’ and taking every tax off the shelf is not the solution to the budget problem, Scott Morrison says.

Federal Treasurer Scott Morrison speaks at press conference in Sydney, Wednesday, March 30, 2016. (AAP Image/Mick Tsikas) NO ARCHIVING

TREASURER Scott Morrison has dismissed research from a think tank that would bring the budget back to surplus within two years.

The Committee for Economic Development of Australia report released on Tuesday recommends several options to raise revenue by $15 billion and cut expenditure by $2 billion that would return the budget to balance in 2018/19.

That would be two years earlier than what Mr Morrison predicted in his midyear budget released in December.

But the treasurer said you don’t tax your way back to a surplus. “You don’t go to the tax supermarket and take every tax off the shelf and put it up as a way of managing the economy,” Mr Morrison told reporters in Sydney on Wednesday.

He said the responsible way to balance the budget is by getting expenditure under control and ensuring things are done to help grow the economy — which in turn produces revenues.

Mr Morrison will hand down his first budget on May 3, a week earlier than earlier planned, to make room for a possible double-dissolution election on July 2.

Australians are seemingly unimpressed by such arrangements.

The latest weekly ANZ-Roy Morgan consumer confidence gauge, the first since prime minister set the election timetable, fell 1.3 per cent.

ANZ head of Australian economics, Felicity Emmett, said the lead-up to an election always has the capacity to weigh on confidence, and this would have been heightened with the prospect of a double-dissolution election — the first since 1987.

“The government’s decision to bring forward the commonwealth budget is likely to put the issue of strained public finances firmly at the front of consumers’ minds,” she said.

At the same time, Labor frontbencher Jason Clare said there is confusion over taxation.

A promised personal income tax cut has been shelved, there is talk of a company tax rate cut and now the possibility of states setting their own income tax rates is being floated.

“For Australian workers out there, the company they work for is going to get a tax cut and they’re not, and instead they are going to be slugged by their state governments,” he told Sky News. “People will think ‘What the hell is going on?’”