Turnbull Tax Cuts Favour the Middle Class
On Friday the government released Treasury modelling which showed that the vast majority of the benefit from their proposed $144 billion in personal income tax cuts will go to the middle class.
Only $9 billion worth of cuts will go to taxpayers with incomes of more than $200,000 a year.
In 2024, when the 32.5% rate kicks in for taxpayers earning between $41,000 and $200,000, average weekly earnings will be more than $100,000 as predicted by Treasury.
The average wage earner will be a significant beneficiary of the change to the tax rates.
“It’s fair, it’s progressive, it maintains the progressive nature of the tax system but, above all, it reaches out to hard working Australians, hard working families on middle incomes,” Malcolm Turnbull told the NSW Liberal Party State Council in Sydney.
“We say to them, ‘We want you to be able to realise your dreams, and we are doing everything we can to ensure that the tax system gives you every encouragement to have a go, get ahead, and advance your family’s dreams.”
Treasurer Scott Morrison said the Treasury figures put a hole in Labor’s claims that the cuts will favour the rich.
“Labor have no excuse – they know what the cost is for their plan and our plan,” Mr Morrison told ‘Fairfax Media’ on Saturday.
“They need to make a decision about whether they’re going to commit to middle income tax relief in this country.”
At the moment Labor is a bit at sea on how to respond to the government’s tax plan.
Their initial response was to produce bigger tax cuts for lower income earners and claim that their plan was bigger, fairer and simpler than the government’s seven year tax plan.
On the other hand they voted for the government’s plan in the House of Representatives so they could keep their options open.
Labor will hang on to its current plan up until the by-elections but, if there’s a swing against them, it will be an indication that the swinging voter prefers the option of long term certainty and they will have to make some adjustments to their policy.
On the other hand there is pressure on the Government to withhold tax cuts from the big multinationals and the banks.
If the Government has a big swing against it in the by-elections then it may have to rethink its corporate tax policy.
The latest Newspoll shows the Coalition slipping backwards from its position just after the budget which is not a good indication.
Both parties have a lot of work to do to sell their packages.
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