AUSTRALIA PLEDGES TAX CUTS

One of measures to help people deal with rising cost of living

AUSTRALIA’S conservative government pledged tax cuts for low and middle earners, cheaper beer, and billions of dollars for new roads and rail lines in a pre-election budget yesterday.

The set of measures are widely seen as the unofficial start of campaigning ahead of national polls due by May next year, with the government working to demonstrate fiscal responsibility while offering some sweeteners.

“The government’s plan for a stronger economy will put more money back in the pockets of Australians, create more jobs, continue to guarantee essential services and keep Australians safe,” said Treasurer Scott Morrison.

Morrison projected a budget deficit of A$14.5 billion (RM42.74 billion) in 2018-2019, but said it would return to a slim surplus of A$2.2 billion a year earlier than forecast in 2019-2020.

Personal tax cuts for those earning less than A$87,000 a year were a cornerstone of a budget sold as helping Australians deal with the rising cost of living.

It amounts to barely A$10 a week, but that was all the centreright government, which is lagging the opposition Labour in opinion polls, said it could responsibly afford.

Voter support for Prime Minister Malcolm Turnbull has eroded in recent months amid perceived dysfunction in Canberra, with the Liberal leader having to bat away calls to step down.

The budget is seen as a way of reaffirming his credentials ahead of the election.

Pumping money into infrastructure projects to create jobs was a key thrust, with the government earmarking A$5.1 billion to bankroll a rail link to Melbourne airport in a state governed by Labour.

It also put A$1 billion towards easing congestion on the busy freeway linking Brisbane and the Gold Coast tourist region, in another Labour state, as part of a 10-year national transport plan.

The government had already announced some big ticket items, including half a billion dollars to protect the Great Barrier Reef and plans to do away with a bizarre beer tax that hits craft breweries 40 per cent more because they use smaller kegs.

The government also handed A$140 million to the local film industry and there was more money for old-age care to encourage people to stay in their own homes longer.

The cash splash was made possible by a boost to revenue from a pick-up in commodity prices, more company tax, and employment growth putting less strain on welfare benefits.