Australia to Cut Taxes for Low- to Middle-Income Earners, Report Says
Prime Minister Scott Morrison’s government will bring forward tax cuts for low and middle- income earners when it unveils the federal budget on Tuesday, the Australian Broadcasting Corp. reported.
Those on incomes between A$37,000 and A$126,000, or about 10 million Australians, will receive the relief, according to the report. The cuts come as the government reshapes a seven-year tax plan that has already been legislated, the ABC reported, without saying where it obtained the information.
Trailing badly in opinion polls before elections next month, the budget offers the Liberal-National coalition government a chance to close the gap with the main opposition Labor party. Morrison has already earmarked about A$9 billion ($6.4 billion) for expected pre-election giveaways and the treasure chest may be even deeper, as stronger than expected commodity prices and rising employment boost tax receipts.
The government will seek to legislate the tax cuts this week, before asking the governor-general to dissolve parliament on Friday or Sunday for an election on May 11 or 18, the ABC reported.
Labor has already pledged tax cuts for low and middle-income earners that are 75 percent higher than those legislated by the government and has indicated it won’t oppose further relief in the budget.
The government is on track for a A$4.8 billion surplus for the fiscal year through June 2020, according to the median forecast in a Bloomberg survey of 14 economists. The Australian newspaper said Tuesday the budget would forecast that the current net debt bill of about A$370 billion would be wiped from the books by 2029-2030.
Morrison has already announced a clutch of spending measures including a one-time payment of A$75 for singles and A$125 for eligible couples to help pay their energy bills. He is also expected to boost spending on road infrastructure by A$1 billion, focusing on improving freight networks, the Australian reported on Monday.
The government will also make it easier for elderly Australians to top up their retirement savings. Those aged 65 and 66 will be able to make voluntary contributions to their superannuation, without having to meet a condition that currently requires them to work 40 hours over a month.
©2019 Bloomberg L.P.