PM points to tax cut ‘opportunity’

Prime Minister Scott Morrison. Picture: Tracey Nearmy/Getty Images
Prime Minister Scott Morrison. Picture: Tracey Nearmy/Getty Images

PRIME Minister Scott Morrison has hinted at fast-tracking tax cuts for workers in the federal budget next week.

Amid mounting speculation his government will bring forward income tax cuts that have already been legislated, the prime minister said he always jumped at an opportunity to give people a break.

“My record is lowering taxes for Australians,” he told reporters in Melbourne on Monday.

“We currently have $144 billion worth of tax relief for all working Australians in this country, and wherever I get the opportunity to give Australians further tax relief, I never miss the opportunity.”

Treasurer Josh Frydenberg at the weekend did not rule out further tax relief, saying only that the budget would frame the coalition’s election pitch.

Treasurer Josh Frydenberg. Picture: Tracey Nearmy/Getty Images

“The next election will be about what kind of nation Australians want over the next decade,” he told The Australian.

“On our side it is about balancing the books, growing the economy with more jobs and lower taxes.”

Senior Liberal Arthur Sinodinos on Sunday said tax cuts could help those with lower incomes until wage growth picks up.

Proposals from the ACTU and others to lift the minimum wage would deliver a pre-tax increase but a similar effect could happen through a “proper tax cut for low and middle-income earners”, he told the ABC’s Insiders.

The government passed a personal tax cut package through parliament last June, with the first stage kicking in for the current financial year.

Further reductions are due in 2022 and 2024, leading to a single person on $30,000 ultimately getting a tax cut of $200 a year, while someone on an average wage of around $85,000 would get $540 and a $200,000-a-year salary earner would get $7225.

Labor has opposed the higher-income tax reductions and says it will give cuts of $350 to people earning $25,000 and up to $928 for people on $90,000 a year.

“All I know is that we are offering bigger, better, fairer tax cuts,” Opposition Leader Bill Shorten told reporters in Melbourne.

“If the government does more we’ll have a look at it, if the nation can afford it.”

The budget will be handed down on April 2 and an election is expected in mid-May.

BUDGET 2019 – WHAT WE KNOW SO FAR

BIG PICTURE

* Overall theme: “A stronger economy and a secure future”

* Federal election is due in mid-May

* Better than expected surplus for 2019/20 (MYEFO: $4.1 billion in 2019/20)

* 3 per cent growth for 2019/20 (MYEFO forecast)

* 5 per cent unemployment rate for 2019/20 (MYEFO forecast)

* Migration cap to be reduced to 160,000 from 190,000

* 1.25 million new jobs to be created over the next five years

* Expectation of a “stimulus” worth about $6 billion, adding about 0.4 percentage points to GDP

TAX

* Likely bring-forward of the July 2022 income tax cuts, on top of those already starting July 1 this year, as part of an already-legislated $144 billion plan

* Possible improvements to tax offsets for low-income earners

* Rules around $69 billion GST revenue distribution to the states have changed, with WA the main beneficiary

* Instant asset write-off extended to June 2020 and upped from $20,000 to $25,000. Allows small business with an annual turnover of less than $10 million to deduct the cost of assets such as cars and equipment

* Tax office and other agencies to crack down on welfare cheats and tax dodging

ROADS, RAIL

* $75 billion infrastructure plan over 10 years continues

* Business case for Melbourne airport rail link

* City deals for Adelaide, Hobart, Townsville, Launceston, Western Sydney, Darwin, Geelong, South East Queensland and Perth

HEALTH

* $220 million from Medical Research Future Fund for research into heart disease

* $496 million for Victorian cancer research, services and facilities

* $200 million to reduce out of pocket costs for scans such as ultrasounds and x-rays

BANKS

* $600 million boost for financial regulators ASIC and APRA to deal with banking royal commission fallout

SECURITY

* $294 million to upgrade security at airports in a bid to prevent terrorist attacks

* Australian Space Agency to be funded

ENERGY

* $2 billion for Emissions Reduction Fund, now called the Climate Solutions Fund

* $1.4 billion for Snowy Hydro 2.0

* $56 million for Battery of the Nation and Marinus Link projects in Tasmania

* Speculation of an announcement of the first power projects to be underwritten by the government, following 66 expressions of interest

EDUCATION

* $60 million for James Cook University’s Cairns Tropical Enterprise Centre

* $60 million indigenous education hub in Melbourne

WELFARE

* $78 million to provide more housing for women and children fleeing family violence

– $129 million to extend cashless welfare card to all of Northern Territory, and to Cape York communities in Queensland

CULTURE

* $12 million for Cooktown 2020 Festival (250th anniversary of Cook’s landing) and replica HMB Endeavour to circumnavigate the country