Election-year tax cuts on the agenda

WORKERS could be in line for election-year tax cuts as government MPs pressure Malcolm Turnbull to provide relief to struggling households.

The Mercury can reveal a growing group of MPs are advocating for income tax cuts, amid renewed warnings about bracket creep forcing up taxes for middle-class Australians.

Some MPs are pushing for the Government to delay the rest of its company tax cuts package, which has little prospect of parliamentary support, to pay for income tax relief.

Their concerns come after the Parliamentary Budget Office revealed more than 1.6 million Australians would be slugged higher taxes over the next five years.

Victorian MP Tim Wilson and Tasmanian Senator Eric Abetz are among those leading the charge, with both wanting tax cuts in next year’s Budget.

A senior Government source said it was more likely to happen in an election year, which the PM hopes will be 2019, and that delaying company tax cuts could pay for it.

“We’ve got some of them through, and that’s a huge bonus for small and medium businesses, but if we’re not going to get it through we should be delivering relief for families as soon as we can,” the source said.

Treasurer Scott Morrison said last night: “Wherever I can cut taxes, I will.”

Mr Wilson said comprehensive reform was needed to a tax system “stuck in the 1950s” which placed an “increasing burden on working people through bracket creep”.

Senator Abetz expressed concern about bracket creep, saying tax cuts would be “well received by the electorate”.

Some MPs argue tax cuts would ease the pain of a planned 2 per cent rise in the Medicare levy to fund the National Disability Insurance Scheme.

Mr Morrison said the Government already had “significant runs on the board” by adjusting the middle-income tax bracket and scrapping the deficit levy.

“This is what Coalition governments should do,” Mr Morrison said.

Treasury Secretary John Fraser recently said bracket creep was “a means of imposing higher taxes by stealth”.

Mr Morrison said he would continue to seek parliamentary support to extend company tax cuts to all businesses so they could “expand, create jobs and give Australians a well-earned pay rise”.

The Parliamentary Budget Office said the Government’s promised return to surplus in 2020/21 relied heavily on income tax revenue.

Deloitte Access Economics has found that the Government’s total tax take would increase at the fastest rate since 2000 over the next two years.