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HomeWorldThe one group of Aussies set for massive $3,000 tax cut

The one group of Aussies set for massive $3,000 tax cut

Treasurer Jim Chalmers has stepped up his selling of Labour’s revamped tax cuts, releasing new analysis showing that families are expected to pocket an average tax cut worth more than $3,000 next financial year.

The intervention comes as opposition leader Peter Dutton stepped up his attacks on Labor on Saturday, accusing the government of ‘failing in economic management’.

His criticism came amid renewed concerns from the Reserve Bank and economists that big spending budgets risked thwarting efforts to tame persistent price pressures.

The new analysis from the Treasury, eight days before the introduction of the tax credit, shows that the average household with children is expected to pocket a tax cut of $3,268 next financial year – worth $63 a week.

Households without children are expected to receive more modest relief, with the Treasury Department calculating an average annual tax cut of $1,716, which equates to $33 per week.

Treasurer Jim Chalmers has stepped up his sales of Labour's revamped tax cuts, releasing new analysis showing that families are expected to pocket an average tax cut worth more than $3,000 next financial year (stock image)

Treasurer Jim Chalmers has stepped up his sales of Labour’s revamped tax cuts, releasing new analysis showing that families are expected to pocket an average tax cut worth more than $3,000 next financial year (stock image)

Households without children are expected to receive more modest relief, with the Treasury Department calculating an average annual tax cut of $1,716, which equates to $33 per week (stock image)

Households without children are expected to receive more modest relief, with the Treasury Department calculating an average annual tax cut of $1,716, which equates to $33 per week (stock image)

Households without children are expected to receive more modest relief, with the Treasury Department calculating an average annual tax cut of $1,716, which equates to $33 per week (stock image)

Speaking on Sunday, Dr. Chalmers said families and central Australia were designed to be the main beneficiaries of the phase three package unveiled in January.

“Fighting inflation and lowering the cost of living is our priority,” Dr Chalmers said.

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“Our economic plan is all about helping Australians earn more and keep more of what they earn, which is why we’re focused on strong and sustainable wage growth and cost-of-living tax cuts, which come into effect from July 1 to start.’

But addressing party stalwarts a day earlier, Mr Dutton criticized the government for “fomenting the ugly politics of envy” through their tax changes.

“The cost of living crisis gripping our nation is a result of Labour’s own fault,” Dutton told the Liberal Party’s annual federal council in Sydney.

“Rather than taking pressure off inflation by reining in wasteful spending, [Anthony Albanese’s] The government has increased spending by as much as $315 billion.”

Australians are paying 20 per cent more in personal taxes since the last election,” he said, referring to the impact of “brack creep” as higher wage growth, fueled by the current inflationary squeeze, increases workers’ taxable income.

Shane Oliver, AMP’s chief economist, said cost-of-living relief would potentially prove popular with voters, but government decisions were “making the RBA’s job harder”, which would ultimately delay mortgage relief.

Speaking on Sunday, Dr.  Chalmers said families and central Australia were designed to be the main beneficiaries of the phase three package unveiled in January.

Speaking on Sunday, Dr.  Chalmers said families and central Australia were designed to be the main beneficiaries of the phase three package unveiled in January.

Speaking on Sunday, Dr. Chalmers said families and central Australia were designed to be the main beneficiaries of the phase three package unveiled in January.

“It’s another reminder of why the responsibility for getting inflation falls in the hands of the RBA and not politicians,” Dr Oliver said.

“Unfortunately, this means we must continue to rely on the blunt instrument of high interest rates, with its unfair impact on different parts of the community.”

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That view was shared by Westpac economists who raised the alarm over increased cost-of-living support due to be unleashed from July 1, warning that tens of billions in spending in the Labor state and federal budgets threatened to fuel inflation stir up.

“The question is not whether budget positions are less restrictive and more accommodative, but whether they are unambiguously more accommodative,” said Pat Bustamante, senior economist at Westpac.

‘The growing fiscal stimulus will provide additional support, but increases inflation risks, especially in areas where there are existing capacity constraints, such as the construction sector.

“If concerns about persistent price pressures persist, this could increase the risk that interest rate cuts will be postponed.”

Mr Dutton criticized the government for

Mr Dutton criticized the government for

Mr Dutton criticized the government for “fomenting the ugly politics of envy” through its tax changes

The new research comes after RBA officials on Tuesday indicated growing concerns that large spending budgets risked boosting demand and undermining monetary policy.

“Recent budget outcomes may also have an impact on demand, although federal and state energy cuts will temporarily reduce headline inflation,” the statement from the RBA’s June meeting said.

In addition to the Labor tax package, households will also benefit from a $300 energy rebate in the coming financial year, saving $75 on energy bills in the September quarter. The measure will be supplemented with additional electricity rebates in certain states, including Queensland and Western Australia.

Following the federal government’s intervention in the national wages case, 2.6 million minimum and wage earners will see their pay packets increase by 3.75 per cent from July 1 – an increase of at least $33.10 per week.

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