Bill shocks are the flipside of a surplus built on higher tax collections and tighter access to support payments.
Middle earners are set to pay 18.8% of their income in tax instead of 14.9% under the projections that show 10 years of surplus budgets.
To start with each side offers a “lamington” (Low and Middle Income Tax offset), then the differences get serious.
After some years the Coalition’s proposals would cost $40 billion per year more than Labor’s, but by then Labor will have probably cut tax further too.
What’s not to like about a flatter tax system? Well, for starters, the one laid out in this budget won’t actually simplify our lives.
Flat tax is simple, Kondo simple. But that doesn’t mean it simplifies lives.
The budget tax cuts aren’t tax reform, and probably can’t be paid for over the longer term.
Should the Coalition’s $300 billion of tax cuts ever be enacted, they would push the budget back towards deficit.
Much of what’s been promised would have had to happen anyway.
The promised tax cuts will benefit high earners in 2022 and 2024, but by then they’ll need it.
Timing tricks help politicians avoid dealing with the substance of their policies. That isn’t going to change any time soon.
It seems that timing tricks are now a thing in Australian politics. Revenues are brought forward and spending pushed back for cosmetic effect.
The PBO has likely overestimated future personal income tax revenue.
The parliamentary budget office expects Australians to be paying significantly higher average tax rates in 2020/21, but their assumptions bear no relation to reality.
Social Services Minister Christian Porter in Question Time.
Christian Porter said Australia’s welfare system ‘was costing over 100% of all income tax raised’ under Labor after the GFC, and that it’s ‘around 80%’ under the Coalition. Is that true?
How possible will budget repair be?
Hoping for the best is not a budget management strategy: but Australia can set realistic goals.
Fairness is in the eye of the beholder when it comes to bracket creep.
Short-term, the bracket creep measures help high income earners. But longer-term it evens out.
Economic reality has intruded on rosy budget predictions for years now and the Pre-election Economic and Fiscal Outlook may soon challenge Treasurer Scott Morrison’s forecasts.
Budget repair was put off till later, and the net impact of decisions in the budget was small, but it will be easier to defend in the coming election campaign than some other recent efforts.
Scott Morrison’s budget will determine whether the election campaign starts well or poorly for the government.
“Are you nervous?” journalist Laurie Oakes asked Scott Morrison two days before the treasurer brings down his first budget. Morrison didn’t answer that but he has every reason to be anxious. As he keeps…
Deloitte strongly argues the budget has a revenue problem, not just a spending problem – a proposition consistently rejected by Treasurer Scott Morrison.
The federal budget deficit from now through to 2018-19 is likely to be $129 billion, $21 billion worse than in the December official budget update, according to Deloitte Access Economics.
Treasurer Scott Morrison has backed away from the personal income tax cut he had been hinting at.
It’s not easy to prove which type of tax cut will drive more jobs and growth.
In comments to the Coalition joint partyroom, Tony Abbott urged the government to go down the savings path.
On Monday, a scarifying account of Tony Abbott’s prime ministership appears in the bookshops. By journalist Niki Savva, The Road to Ruin: How Tony Abbott and Peta Credlin Destroyed Their Own Government…
Treasurer Scott Morrison was criticised for not announcing any new policy in his National Press Club address.
If Scott Morrison ever watched Joe Hockey and thought “how much better I could do”, he’s getting a rough lesson in humility.
Treasurer Scott Morrison emphasises the government’s desire to control “new spending” in a speech to the National Press Club.
Treasurer Scott Morrison has “rescaled” the tax debate to hold out the prospect of “modest” tax relief that may prevent average wage earners moving into the second highest tax bracket.
There are some relatively easy administrative ways of tackling bracket creep.
These three tax areas have become mired in poor analysis and misconceptions.
Treasury modelling released by the government backs up Malcolm Turnbull’s decision to walk away from an increase to the GST.
The government has released Treasury modelling showing a tax mix switch with a 15% GST and income tax cuts would deliver no gains to economic growth.
If the tax cuts are paid for partly by expenditure restraint on health, welfare, spending benefits are likely to be negligible.
Hockey’s call to cut personal income taxes to improve economic growth sounds reasonable - but this is too simplistic.