Warnings from the treasurer, Jim Chalmers, that Australia’s economy is slowing and that the population is ageing have prompted calls to scrap the stage-three tax cuts.
Chalmers said the latest Australian population data showed an ageing population continues to present a demographic challenge for Australia and the budget, with the government having to keep one eye on current challenges, while the other focuses on longer term needs in health, pensions and support services.
Work is under way for the May budget, which will be the first to tackle the $254bn Morrison government stage-three tax cuts. Labor voted in support of tax cuts while in opposition and went to the election promising no changes to stage three, which were already legislated and due to come into effect mid-next year.
Chalmers said Labor’s position on the cuts hasn’t changed, which the acting Greens leader, Larissa Waters, said was absurd.
“The Greens will use our balance of power position in the parliament to continue to fight against Labor’s unfair and irresponsible stage-three tax cuts. We demand strong social services, not decades of entrenched economic inequality,” she said.
“If the government is worried about how we’ll pay for essential services like Medicare and NDIS in the future, it beggars belief that they’re pushing ahead with the stage-three tax cuts.”
Waters said the government had ample opportunity to lower the cost of living for people struggling with inflation, higher interest rates and a lack of wage growth, as well as lift people on social services payments like Jobseeker out of poverty.
“When the Labor party is adopting Morrison-era tax cuts for the super wealthy instead of funding dental and mental health on Medicare, building public homes, ending poverty payments and making childcare free, they can’t also cry poor,” she said.
“Instead of pointing the finger at the dwindling proportion of tax revenue from working families, they should axe the stage-three tax cuts to raise revenue to fund the services all people deserve.”
After negotiations with independent senator David Pocock, an economic inclusion committee will examine the adequacy of Australia’s welfare payments before the budget and if necessary make recommendations for changes.
The government does not have to follow the recommendations, but does have to publicly account for why it may reject the committee’s findings.
Chalmers and the government has given no guarantees it will lift the rate of Jobseeker, beyond a promise to examine “what can be done” ahead of each budget.
But with the stage-three tax cuts implementation date moving closer and into the budget sphere, pressure is being put on the government to answer how it will forgo the estimated $254bn over 10 years in lost tax revenue.
Chalmers said the government was walking an economic tightrope.
“Our job as a government is to provide responsible cost of living relief without adding to inflation,” he said.
“Just yesterday we made medicines cheaper. That’s why we’re making early childhood education cheaper, we’re providing responsible relief when it comes to the cost of electricity at the household level and small businesses, if we can.
“These are all important ways we can help Australians through a difficult period. The cost of living is really the key pressure on Australians as 2022 turns into 2023, we understand that, we appreciate that, and we’re acting where we responsibly can.”
