Tax car­rot as Mal­colm aims for the mid­dle

Sur­plus in sight as cash ship comes in

Sunday Herald Sun - - Front Page - AN­NIKA SMETHURST

LOW and mid­dle-in­come earn­ers are set for tax cuts in Tues­day’s Bud­get, which could also un­veil a re­turn to sur­plus sooner than ex­pected.

The Turn­bull Govern­ment has con­firmed it will “pri­ori­tise” tax cuts for Aus­tralians earn­ing up to $87,000.

Re­lief will also be of­fered to work­ers with an­nual in­comes of $180,000-plus with a lift in the tax bracket ex­pected af­ter lower in­come earn­ers bank tax cuts.

Fi­nance Min­is­ter Mathias Cor­mann said the govern­ment would “stick to the speed limit” but con­firmed tax re­lief was on its way.

“When it comes to per­sonal in­come tax cuts our first pri­or­ity is to pro­vide tax re­lief to low and mid­dle-in­come earn­ers,” Se­na­tor Cor­mann told the Sun­day Her­ald Sun.

He said the Bud­get was on track for a sur­plus but said “the spe­cific tra­jec­tory will be re­vealed in the Bud­get”. His com­ments have fu­elled spec­u­la­tion the govern­ment may an­nounce a re­turn to sur­plus a year ahead of sched­ule in 2019-20.

LOW and mid­dle-in­come earn­ers will be the big win­ners in Tues­day’s Bud­get, which is on track to re­turn to sur­plus sooner than ex­pected.

The Turn­bull Govern­ment has con­firmed it will “pri­ori­tise” tax cuts for Aus­tralians earn­ing up to $87,000.

Tax re­lief will also be of­fered to work­ers with in­comes above $180,000 a year, with a lift in the tax bracket ex­pected af­ter lower in­come earn­ers bank their tax cuts.

Speak­ing in Canberra yes­ter­day, Fi­nance Min­is­ter Mathias Cor­mann said the govern­ment would “stick to the speed limit” but con­firmed that tax re­lief was on its way.

“When it comes to per­sonal in­come tax cuts, our first pri­or­ity is to pro­vide tax re­lief to low and mid­dle-in­come earn­ers,” Se­na­tor Cor­mann said.

He said the Bud­get was also on track to re­turn to sur­plus, but said “the spe­cific tra­jec­tory will be re­vealed in the Bud­get”.

His com­ments have fu­elled spec­u­la­tion the govern­ment may an­nounce a re­turn to sur­plus a year ahead of sched­ule in 2019-20.

“We are on a be­liev­able track back to sur­plus,” Se­na­tor Cor­mann said yes­ter­day.

Se­nior min­is­ters told the Sun­day Her­ald Sun that a dra­matic im­prove­ment in rev­enues meant the govern­ment now had the op­tion to re­vise its fore­cast and could po­ten­tially de­liver a sur­plus of be­tween seven and $10 bil­lion by 2019-20. If achieved, it would be the first sur­plus since 2007-08, be­fore the global fi­nan­cial cri­sis struck.

The ex­tra cash flow is con­sis­tent with an eco­nomic anal­y­sis by Deloitte Ac­cess Eco­nom­ics, re­leased late last month, which pre­dicted the Bud­get would be $7 bil­lion stronger than fore­cast in De­cem­ber due to strong com­pany tax in­come and solid com­mod­ity prices.

But Deloitte fore­caster Chris Richard­son said an early sur­plus was un­likely be­cause the Coali­tion needed much of its wind­fall to de­liver promised in­come tax cuts.

Mr Richard­son warned the govern­ment against mak­ing an im­pul­sive de­ci­sion with its un­ex­pected cash boost.

“We have seen times when sud­denly it’s all easy and bud­get­ing is a breeze,” Mr Richard­son said.

“His­tory would sug­gest that’s when we make our big­gest bud­getary mis­takes.”

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