CANBERRA: Australian Treasurer Joe Hockey has said that income tax cuts will be needed to avoid restraining both economic growth and the wealth of Australians. But he won’t nominate a specific date for any cuts.
Average wage earners of about $75,000 are fast approaching the second highest tax threshold of $80,000 just through bracket creep and wage inflation. “When they go into that second highest tax bracket it starts to detract from economic growth,” Mr Hockey told reporters in Canberra after releasing his 2015 intergenerational report. That would be a disincentive for people to work and a constraint on wealth. “So we have to give tax breaks to Australians,” he said.
The timing will depend on a point at which the federal budget returns to a sustainable surplus. The intergenerational report predicts that will happen in 2019/20, but only as long as all of the government’s measures from its 2014 budget clear parliament.
