Budget 2016: Scott Morrison to close tax loopholes for high income earners

Scott Morrison confirms Budget plans to close tax loopholes by high-income earners and more public service cuts.

Treasurer Scott Morrison plans to close tax “loopholes” exploited by high-income earners in next Tuesday’s budget. Picture: Kym Smith

Treasurer Scott Morrison plans to close tax “loopholes” exploited by high-income earners in next Tuesday’s budget, amid warnings of a $16 billion blowout in the deficit.

The Treasurer has cautioned the budget would be hit by economic forces beyond the government’s control, saying last night that the government was focused on stimulating economic growth in a difficult global environment.

The government plans a modest tax cut for workers on above-average incomes, with Mr Morrison today ridiculing suggestions that Australians would prefer better social services than a tax cut.

“For those who want to pay more taxes, then we can allow for them to go down to the tax office and they can register for themselves to pay more taxes,” he told ABC radio.

Mr Morrison said voters wanted to see a “more sustainable” tax system with a lower overall tax burden.

“I think they want to see a tax system where we crack down on multinationals seeking to avoid tax, or on those loopholes that exist in the system and they do exist for high-income earners and you can expect us to be addressing that as well,” he said.

“What you don’t do if you want to grow the economy, if you want to support jobs, you don’t increase income tax.”

Mr Morrison said the Treasury was still finalising its growth and revenue forecasts ahead of the May 3 budget.

“You control what you can control in a budget and what you can control is that you don’t spend more than you save. That’s certainly what we have always been doing,” he said.

Mr Morrison flagged further cuts to federal government agencies in the budget, warning public servants must be forced to deliver “the same quality … for less”.

The Treasurer said the push for greater efficiency in the public service had been a “key driving thought and principle” in the drafting of the budget.

“Out there in the economy today, businesses are being told that they need to produce the same quality of product to be competitive in the market and they need to do it for less,” he told reporters in Canberra.

“Government should not be given a leave pass from having to drive the sort of innovation in its own operations to deliver the same sorts of things that businesses and employees around the country are being asked to do, and that has been a key … practical principle that is driving our thoughts and our preparation of this budget.”