Will tomorrow’s Budget leave you financially better off? It all comes down to whether you earn more or less than $87,000 a year.
Workers who earn that figure or less can expect tax relief starting from July 1 this year, The Australian Financial Review reported on Monday.
Meantime, people on more than $87,000 will get tax relief in the long run, but may not feel it in their wallets for years.
Finance Minister Mathias Cormann and Treasurer Scott Morrison all but confirmed the approach in interviews at the weekend.
Cheers to that? Treasurer Scott Morrison lifts a keg during a Budget announcement last week
Whether the Budget leaves you financially better off is an $87,000 question, reports indicated
Coming soon: Workers ready a stack of Budget papers ahead of Tuesday’s announcement
‘The judgment that we’ve made is to prioritise low and middle income earners in the first instance,’ Mr Cormann told Sky News.
‘But of course over time we do need to ensure that all Australians have the right incentives… to make the best possible contribution to the Australian economy.’
Mr Cormann said the government was taking a ‘phased approach’ to tax cuts, which will be rolled out over several years.
Speaking to the Today Show, Mr Morrison stressed the tax cuts would not be ‘mammoth’ but rather ‘responsible’ and within the country’s means.
They would represent ‘real relief’ to Australians who have gone without a pay rise for years, he claimed.
‘We’ve flagged for many many months now our priority is on tax relief for low to middle income earners.
‘They’ve been doing it tough. It’s been some time since they’ve had a decent pay rise.’
Cheers to that: Treasurer Scott Morrison and Finance Minister Mathias Cormann last week as they announced tax relief for craft brewerss.
The Treasurer’s golden ticket? Scott Morrison is expected to announce it will reach a surplus a full 12 months early during Tuesday’s Budget speech
Top economic forecaster Chris Richardson previously said voters could be up for a ‘nice sandwich and malted milkshake per week’ from income tax cuts.
But the Deloitte Access Economics partner said the devil is in the detail – because the Government could design its tax cuts in different ways.
All will be made clear tomorrow night, when the Treasurer is expected to announce Australia will be in surplus in two years.
The government is expected to reveal it will bring the balance sheet into surplus in the 2019-20 financial year, a full 12 months earlier than forecast.
That is despite $24.5 billion in new infrastructure funding across the entire nation, The Australian newspaper pointed out.
That includes $5 billion for rail links connecting to the new Western Sydney Airport at Badgerys Creek and from the Melbourne CBD to Tullamarine Airport.
The government is splashing billions on a Melbourne airport link train (current train pictured)
The Turnbull Government is tipped to announce during tomorrow’s budget release that it will bring the balance sheet back to surplus in the 2019-20 financial year which would be a full year earlier than orignally forecast
Mr Morrison has also confirmed the government’s 23.9 per cent tax-to-GDP target will be formally written into the Budget.
‘It is now necessary to make it a clear decision and adopt it as part of the fiscal strategy, it’s in, we’ve put it in, and we will keep it in,’ Mr Morrison was quoted saying.
Interestingly, Labor had endorsed a similar tax goal in 2013 but Labor Treasury spokesman Chris Bowen was unable to commit his party to the same target when questioned about it.
Originally a surplus of $10.4 billion was expected by the 2020/21 financial year after a deficit of $2.6 billion in the previous financial year.
‘It is now necessary to make it a clear decision and adopt it as part of the fiscal strategy, it’s in, we’ve put it in, and we will keep it in. An incoming government would have to reverse it,’ Mr Morrison said