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(Australian Associated Press)
Scott Morrison’s government is doing its best to talk down Labor’s promises of bigger tax cuts if it wins the upcoming federal election, as speculation mounts the coalition could bring forward its own cuts.
The federal government has released to The Australian figures it says shows 1.9 million people on middle incomes would pay more tax under Labor’s policy.
The analysis of 2016/17 Australian Taxation Office data says bracket creep – when inflation pushes wages and salaries into higher tax brackets – would be responsible for those people paying more.
“For individuals and families, this would mean less money in their pockets every week to pay the bills and meet expenses,” Treasurer Josh Frydenberg told The Australian on Wednesday.
The comments come amid speculation the government is planning to bring forward already legislated tax cuts in next Tuesday’s budget.
The government got its personal tax cut package through parliament last June, with the first stage kicking in for the current financial year and further reductions due in 2022 and 2024.
The cuts in their final iteration will lead to a single person on $30,000 keeping an extra $200 a year, while someone on an average wage of around $85,000 would get $540 and a $200,000-a-year earner would get $7225.
Labor has opposed the higher-income tax reductions and offered an alternative package to give cuts of $350 to people earning $25,000 and up to $928 for people on $90,000 a year.
Opposition Leader Bill Shorten says that means a couple respectively earning $60,000 and $80,000 would save $6000 in Labor’s first three years in office.
“Labor is offering nearly 10 million Australian workers bigger, better and fairer tax cuts,” he told reporters in Melbourne on Wednesday.
Shadow treasurer Chris Bowen stressed the data released by Mr Frydenberg is based on a hypothetical scenario in 2022 and 2024.
Should Labor win the next election, it could look to introduce measures to deal with bracket creep or provide further tax relief when it is fair and sustainable to do so, he says.
“Federal Labor is offering a better tax cut right now, not in two elections’ time,” he said.