Higher taxes are never a good idea. And while that’s just an opinion, you’ll be happy to know that lowering taxes can generate economic growth, compensate for flat wages and lessen the risk to the economy from high tax burdens.
Treasurer Josh Frydenberg says the Coalition’s proposal to slash personal and business taxes will bring an end to Australia’s sluggish wage growth.
‘Wage growth has been gradual and we’d like to see it to be stronger,’ he told ABC’s Radio National on Tuesday.
The September quarter saw the biggest increases in wage growth in three years, which was 2.3% over the inflation rate of 1.9%, according to Mr Frydenberg.
Adding to that, the majority of recent monetary statements from the Reserve Bank Governor Philip Lowe were positive for the labour market, AAP reports.
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Morrison supports treasurer tax cuts plans
In a pre-budget interview with AFR Weekend, Mr Morrison supported the decision to priorities tax cuts, describing Labor’s plans to increase taxes to pay down debt, as ‘a dangerous lie’.
‘Consumption as a share of the economy is the biggest component. And there’s been a modesty to that, even with the revisions that we’ve seen in the national accounts, and providing relief in that area particularly where there’s a high propensity to consume is also supportive of growth in the economy as well.
‘So there are good economic reasons for doing it, obviously, but there’s also very sound, I think, some relieving-pressures-on-household-budgets reasons to do it and the two actually work together.’
Currently, the budget remains on track to return to surplus by 2020–21, but the government is facing criticism for panning tax cuts before reaching the tax-to-GDP cap, instead of putting extra money toward higher surpluses and debt, as reported by The Australian Financial Review.
‘We have talked about 2020-21 for a long time now and I can assure you that we are on track for that as we have been for the last five [economic] statements’.
‘So that is important. But there are many important things in the budget. You don’t get there by turning the economy into a snake that eats its tail by having taxes that overburden the economy.’ he said.
Morrison Government determined to pass tax cuts
Mr Morrison said the government remains determined to pass its company tax cuts through the Senate, as reported in the AAP.
Australian Council of Trade Unions secretary Sally McManus claimed the Morrison government’s plan offered nothing for workers facing a wage crisis.
‘Morrison and Frydenberg believe in a failed trickle-down fairytale that says if you give more money to corporations and the already wealthy, that they will eventually decide to share it with working Australians’.
‘This is a lie.’ Ms McManus said.
But, some fail to see how Ms McManus party’s ‘solution’ is any better, or in fact any different to a pipe dream aimed at keeping your hard earned money in the hands and the control of the governments.
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