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Federal Budget 2019: Josh Frydenberg's income tax preference over budget repair comes at a cost for future generations
By Jessica Irvine
Here's a budget scoop for you.
In last year's budget lockup, a very senior Treasury official walked away from me when I attempted to confirm the $140 billion price tag of treasurer Scott Morrison's ambitious multi-year tax cut plan.
In a later press conference, Morrison would confirm the figure. But it was not explicitly mentioned anywhere in the official budget figures.
It's almost as if such largesse - after so much talk about debt and deficits - was slightly embarrassing for a Coalition government.
What a difference an election year - and a new Treasurer - makes.
Josh Frydenberg was decidedly less shy about whipping out the precise $158 billion price tag of his multi-year tax cut package, even using his budget night speech to declare it the "largest personal income tax cuts since the Howard Government".
This year, a handy new table in the budget documents even breaks down the component costs.
It reveals the cost of boosting the Coalition's low- and middle-income earners tax offset to $1060, to best Labor's $928 offering, as $15 billion over four years or just under $4 billion a year.
Costs escalate quickly after that.
Unlike Labor's tax offset, which lasts forever, the Coalition's tax offset expires after four years.
So, to deliver the same magnitude of tax savings to low- and middle-income earners beyond that, the Coalition has designed a two-step tax move to both increase the existing Low Income Tax Offset - from $645 to $700 - and raise the income threshold at which the 19 per cent tax rate kicks in - from $41,000 to $45,000.
This move costs $6 billion a year from 2022-23.
It's more expensive than the first tranche of savings because the benefits of the tax threshold increase go to every single tax payer earning over that amount.
That stands in contrast to Labor's offset, which denies any benefit to people on incomes above $130,000.
But wait, there's more!
The real dollar dazzler in Frydenberg's tax cut package kicks in from 2024-2025, when the 32.5 per cent tax rate - set to apply to all income from $45,000 to $200,000 - is slashed to 30 per cent.
Make no mistake, this is hugely expensive.
The cost is $95 billion over six years - about $16 billion a year.
It is unlikely Labor will match this longer term largesse, but it is likely to come up with a better offer for low- and middle-income earners in the short term.
Which leaves such voters confronting an important question: is a bigger bird in the hand worth two in the bush?
Self-interested calculations aside, many voters might be left wondering about the longer term implications of this budget.
The Coalition insists it has defeated the debt and deficits disaster, projecting net debt - now at a whopping $374 billion - to fall to zero by 2029-30.
One thing is for certain: we could get there a heck of a lot sooner without a whopping $300 billion in tax cuts over the coming decade.
There is a cost to prioritising tax cuts over budget repair.
And it's future generations who pay it.