Source : Perth Now news
Treasurer Jim Chalmers is playing down the government’s chances of a post-budget popularity boost as he defends controversial changes to tax on investments.
After a week dominated by competing economic visions from Labor and the coalition, Dr Chalmers accused the opposition of proposing a $250 billion hit to the budget bottom line in the next decade.
The coalition wants to index tax brackets in line with inflation, effectively giving all Australians a tax cut every year from 2028/29, while Labor has announced a $250 rebate each year for all working Australians.
“What (Opposition Leader) Angus Taylor is proposing to do is to pump the most money into the economy when inflation is already at its highest,” Dr Chalmers told the ABC’s Insiders program on Sunday.
Mr Taylor rejected the suggestion, arguing leaving the current settings in place would effectively amount to a tax hike due to bracket creep as people were pushed into higher tiers through wage inflation.
“If Labor wants to crow about their planned income tax increases of $200 billion, that’s all going to be coming away from the private sector,” he told Sky News.
“That is a plan to grow government and shrink the private sector forever.”
The coalition says its policy will cost about $22.5 billion over the next four years and will be fully offset by savings elsewhere in the budget.
An opinion poll published on Sunday suggested the government’s plan to wind back negative gearing and the capital gains tax discount had been poorly received and was widely regarded among voters as a broken election promise.
According to Freshwater research published by News Corp, 44 per cent of voters thought the budget would leave their household worse off while 13 per cent thought it would improve their circumstances.
More than 80 per cent of those surveyed thought Labor had broken its promise to leave property tax concessions unchanged.
Asked whether he was disappointed by the survey results, Dr Chalmers said he wasn’t expecting support for the government to increase due to its budget reforms.
“I’d be more surprised if there was a bounce,” he said, pointing to the oil crisis and a “predictable scare campaign” as factors driving down support for the government.
“Frankly, we didn’t do this to get a bounce in the polls. We did it to get a boost in first home ownership.”
Prime Minister Anthony Albanese said young people looking to invest in housing, rather than buying a home to live in, would still be able to do so.
“If they have currently a negatively geared property, then there’s no change there, but if they want to have a new investment, they’ll invest in a new property,” he told reporters.
