Extra tax relief for all Australian workers is set to be delivered in Tuesday night’s budget, but it won’t kick in for another year.
7NEWS has confirmed the budget will include $200 to $300 tax offsets for every worker, but they won’t appear until next year’s tax return.
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The one-year delay is designed to reduce the budget’s impact on inflation in the short term, something Treasurer Jim Chalmers says will be a major aim of the government’s financial strategy.
“You will see a focus on cost of living,” Finance Minister Katy Gallagher said. “The tax rebates will go to all wage and salary earners for the next financial year.”
Economist Chris Richardson said the timing was sensible.
“You’ve got to be careful handing out too much money at the moment,” he said. “That would be an inflation risk.”
But the budget comes amid concerns about broken promises, particularly on taxing investment properties. From July 1 next year, negative gearing will apply only to new builds, but continue for investment properties owned before then.
And from July 1 this year, tax concessions on all future capital gains will be slashed, reducing the advantages investors enjoy over first home buyers.
“If governments change their mind or change the position that they previously held, the responsibility is on government to explain that,” Gallagher said when asked about the trust deficit facing major parties.
Opposition housing spokesman Tim Wilson criticised the changes.
“They’re going and they’re shoving their hand down the back of Australians’ pockets,” he said.
But Housing Minister Clare O’Neil defended the approach.
“There is one thing that matters more than any other, and that is building more homes,” she said.
To help achieve that, the budget will include half a billion dollars to cut so-called green tape — complex environmental approvals delaying housing and energy projects.
“What we will see as a result of this announcement is faster ‘yeses’ and faster ‘nos’,” Minister Murray Watt said.
The budget will also include $60 million to house another 4300 homeless youths over the next four years.
The budget’s theme has been revealed as “resilience and reform”, with Chalmers promising the cuts he announces will be bigger than any new spending.
But big cuts can often bring big complaints from voters too.
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