“This modest tax relief demonstrates that, wherever possible, we prefer to leave a dollar in Australians’ pockets than take it for the Government’s pocket, because we know that it is money in your pocket that can help you and your family most”.
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It’s bad news for high income earners and people with superannuation balances of over $1.6 million, but great news for low income earners who want to contribute more to their accounts.
Mr Morrison, however, said there was no plan to “remove or limit” a tax break overwhelmingly favoured by wealthy property investors known as “negative gearing”.
In a statement accompanying the federal budget papers, Small Business Minister Kelly O’Dwyer said the government recognises not all businesses are incorporated and, therefore, not all will benefit from cuts to the company tax rate.
The immediate tax deduction for asset purchases up to $20,000 that was introduced in the 2015-16 Budget will be retained until 30 June 2017.
Morrison made much of Australia’s economic achievements in a global context, highlighting a local economy growing faster than major players such as the United Kingdom, the US, Japan and Germany.
Tuesday’s budget will form the backbone of the Liberal-led coalition government’s pitch to voters for re-election.
As a prelude to this week’s announcement, Morrison promised to deliver a budget that would avoid reckless spending and focus on “jobs and growth for a stronger economy”. “Supporting innovative firms to seize new opportunities will create competition, access to new markets and employment growth”.
The move would pull about half a million taxpayers out of the second-highest tax bracket, with the government losing an extra $3.95 billion in estimated revenue.
And whistleblowers who help expose companies and individuals trying to dodge the tax man will be given increased protection.
In the past week two detainees in another Australian-funded detention center, in Nauru, have set themselves on fire.
The Treasurer pushed out a return to a budget surplus by one year.
Some commentators suggested the budget was typical of the type often delivered in the lead-up to elections – Turnbull is expected to confirm a July 2 ballot by the end of the week.
The government will also beef up its Multinational Tax Avoidance Law (MAAL), which came into effect on January 1, with a new diverted profits tax to impose a 40 per cent penalty tax rate on multinationals attempting to shift their Australian profits offshore.
Mr Morrison handed down the Federal Budget from Parliament House in Canberra on Tuesday night, three years after the government was elected over “outrage” on the “Budget emergency”. Many of these appeared earlier this year in Australia’s first comprehensive Australian Infrastructure Plan.
The cost of cigarettes will rise 12.5 percent every year, starting from 2017, with a packet now costing around Aus$25, according to a report in the Sydney Morning Herald.
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But New Zealand might do better just sticking to its policy of implementing reforms mandated by the Organisation for Economic Cooperation and Development, he said.
