Labor tax policies a recipe for recession: Morrison

Scott Morrison has suggested a Labor government could usher in a recession if it was able to ­implement its tax policies.

Prime Minister Scott Morrison speaks at the Australian Financial Review Business Summit in Sydney on Tuesday. Picture: Mick Tsikas/AAP

Scott Morrison has suggested a Labor government could usher in a recession if it was able to ­implement its wide-ranging tax policies, in comments that sparked a stinging rebuke from Chris Bowen.

In an escalation of the Prime Minister’s attack on Labor ahead of the federal election, Mr Morrison yesterday said he was being “very clear” with Australians.

“The economy will be weaker under Labor, that’s exactly what I’m saying,” he told a business event in Sydney. “Because they’re going to put $200 billion worth of taxes and take Australia’s industrial relations system back to the time when we had a recession in this country.

“I’m being very clear with Australians. No use on the other side going, ‘Oh, I didn’t really realise that it would have that impact’. It will have that impact.”

The comments were slammed as “desperate and dishonest” by Mr Bowen, the opposition Treasury spokesman. “It’s everything we’ve come to expect from a desperate prime minister with no economic policy of his own,” he said. “We can’t wait for an election based on the economic policies of the two sides, but we will turn up to that debate with policies. Scott Morrison and Josh Frydenberg turn up with scare, with fear and with irresponsible statements.”

The economic outlook has been hit over summer, as falling house prices have taken a toll on consumer confidence and spending. GDP figures for the December quarter, which will inform the government’s official budget forecasts, will be released today. They are expected to show the economy grew by 0.4 per cent in the three months to December, and 2.6 per over 2018.

The government was forced to trim back Treasury forecasts in December’s mid-year economic and fiscal outlook as drought crimped exports. Amid the worsening economic outlook, Reserve Bank governor Philip Lowe last month canvassed the possibility of rate cuts. The RBA yesterday held the rate at 1.5 per cent for the 31st consecutive month.