Australians will not receive a bonus tax cut this year to compensate for tax hikes on asset owners as the Albanese government aims to rein in ballooning debt and avoid stimulus that might fuel inflation and interest rates.
This masthead has confirmed through cabinet sources that a potential one-off tax offset for wage earners is expected to be handed to voters at tax time in 2027, rather than this financial year.
Resisting the temptation to woo voters with a tax offset during a petrol price shock, Prime Minister Anthony Albanese and Treasurer Jim Chalmers have made a call to stick this year with the modest “top-up” tax cuts announced in last year’s budget – worth about $5 a week to people earning more than $45,000 a year – and due to kick in from July.
But a follow-up tax cut in 2027-28 will probably get supplemented as the government attempts to deliver tax relief to wage and salary earners without adding to the inflation pressures that prompted the Reserve Bank last week to lift interest rates to 4.35 per cent.
Yesterday, Chalmers pushed back on suggestions that he was hiding a surprise tax cut to unveil on budget night, as he did last year.
He will hand down the budget tomorrow night.
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