Govt to woo voters in new budget

Tax cuts and infrastructure spending among core of document

CANBERRA — Personal income tax cuts, a crackdown on illicit tobacco, funding for space exploration and a heavy investment in infrastructure will form the core of the Australian government’s budget announcement on Tuesday.

The budget is expected to be the last one before Australians head to the polls at the next federal election, and experts have predicted the government will attempt to entice voters on Tuesday with a series of financial measures.

These will include personal income tax cuts, which are expected to form the centerpiece of the plans.

Treasurer Scott Morrison has promised that revenue as a proportion of the economy will never rise above 23.9 percent of GDP and in order to facilitate this, the government must lower the current tax levels.

However, Morrison said these cuts will not be “mammoth” and are able to be implemented as a result of a forecast surplus over the next two years.

Mathias Cormann, Australia’s Finance Minister, announced at the weekend that tax cuts will be aimed at people in the lower tax brackets.

“What I can say to you is that we will be prioritizing low and middle-income earners in the first instance, but there will be a phased approach moving forward,” Cormann said on Sunday.

The federal budget, which will be announced by Morrison on Tuesday, is an annual document which outlines the government’s proposed expenditure and savings over the next four years.

It is expected to include heavy investment in infrastructure, mainly transport and roads as the government looks to reduce congestion and boost the economy.

The government has set aside more than $18 billion to fund projects across the country, including a $3.7 billion Airport Rail Link in Melbourne, Australia’s second largest city, and more than $1 billion allocated to roads and transport in South Australia.

“The investment in road, rail and public transport projects will reduce congestion, keep our roads safe, connect people to jobs and get our produce to market,” Morrison told reporters on Sunday.

He has also announced plans to crack down on the illicit tobacco industry, which is expected to raise almost $3 billion over four years, by preventing the sale of 864 tons of illegal tobacco.

Under the policy, the Australian Taxation Office will be given expanded powers to apply taxes when tobacco enters Australia rather than when products such as cigarettes leave a licensed warehouse.

The government has also confirmed federal funding will also be made available for the establishment of Australia’s first space agency, which will be responsible for coordinating the country’s aeronautical projects.