With a recession looming and rate hikes hurting the waist pockets, the battle over tax cuts is heating up.
Government ministers consistently support the enacted third phase of tax cuts, which will primarily benefit high-income earners.
But now there is speculation that the government is considering tax changes amid worsening economic conditions.
Finance Minister Katie Gallagher said the government had not changed its policy, but did not deny that changes were being discussed.
“While we have not changed our position on Phase 3, we are open about some of the challenges facing our budget,” she told ABC Radio.
“Let’s stop pretending the economic situation hasn’t changed and hasn’t changed since May.”
Phase 3 reductions will flatten the marginal tax rate to 30% for people with incomes between $45,000 ($29,258) and $200,000 from July 2024.
Doing so removes the existing tax amount for those earning between $120,000 and $180,000, and also lifts the highest tax amount.
Treasurer Stephen Jones said the budget is determined by economics, not politics.
“We are getting the budget together in a very difficult situation,” he told reporters in Canberra.
Asked about the tax cuts and whether the government is considering any changes, he said, “I’m not going to get caught up in a ridiculous rule-in, rule-out game.”
“We made a promise. There is no change in our policy.”
Senator Gallagher said the Appropriations Review Board is mindful of international factors, including rampant inflation, when making pre-budget decisions.
She said the decision would be “responsible, sustainable, affordable and targeted.”
The Commission is made up of six ministers, including the Prime Minister, the Minister of Finance and the Finance Minister, and is the government’s highest budget decision-making body.
We will meet on Tuesday, and we will meet again on Wednesday and Thursday.
Green Party leader Adam Band said Australia needs to learn a lesson from the UK prime minister’s withdrawal of proposed tax cuts for the country’s top earners, saying continuing with the third phase of tax cuts would be “an economic It would be an act of vandalism,” he added.
“Britain’s Conservatives looked at the outlook for the global economy and decided that tax cuts were a political poison,” he said.
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Australian Associated Press is an Australian news agency.