The Albanese Government is set to announce a multibillion-dollar cash splash for all working Australians as its centrepiece cost-of-living support in the May budget. Source: The Australian.
Treasurer Jim Chalmers is poised to announce an “earned income offset” of between $200 and $300 for every person in Australia who gets a wage or salary and pays tax, as part of his framing of next week’s budget as one that favours increasing taxes on assets versus wages and salaries.
Warnings were issued last month by the International Monetary Fund that any stimulus should be kept to a minimum with targeted and temporary relief.
But such a broad-based tax offset risks breaching this warning and undermining the “rock solid” support the RBA has asked of the Government in its efforts to fight inflation.
The measure, which comes in addition to the $3 billion in fuel excise cuts, works in a similar fashion to the Low and Medium Income Tax Offset, but would only apply to earned income as opposed to all income, such as that from investments.
It is intended to apply only to the coming financial year, and it is understood not to be means-tested. Retirees who do not work will not benefit from the offset.
The move is the centrepiece of Dr Chalmers’ attempt to address what he calls the “imbalance” between labour income and investment income.
It will be part of a package with other measures such as scrapping negative gearing for existing properties and switching the 50 per cent CGT discount for inflation indexation. Both policies would be grandfathered.
Dr Chalmers was asked yesterday whether there would be any further sweeteners for people beyond the cut to the fuel excise. The Treasurer did not rule it out.
“There is cost-of-living relief in the budget in the form of a fuel tax cut, two more income tax cuts, and a standard deduction as well. That’s in addition to all the other ways that the Government is helping with the cost of living.”
FULL STORY
Budget scoop: Chalmers’ cash handouts for every working Australian (By Matthew Cranston, The Australian)
