Proposed tax cuts to cost Australia 100 bln USD over 6 years: report

Source: Xinhua| 2019-04-09 11:28:28|Editor: Liu
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CANBERRA, April 9 (Xinhua) -- The Australian government's proposed tax cuts for middle and high-income earners will cost the nation 30 billion Australian dollars (21.3 billion U.S. dollars) per year by 2030, a report has found.

An analysis by the Parliamentary Budget Office (PBO), an arm of Parliament charged with "providing independent and non-partisan analysis of the budget," released on Tuesday found that the cuts will cost 18.7 billion Australian dollars (13.3 billion U.S. dollars) in lost revenue in the financial year 2024-25, rising to 30 billion Australian dollars (21.3 billion U.S. dollars) by 2029-30.

Under the third stage of the proposed cuts, which were included in Treasurer Josh Frydenberg's Federal Budget for 2019-20, a 30 percent tax rate will be implemented for all Australians earning between 45,000 Australian dollars (32,054 U.S. dollars) and 200,000 Australian dollars (142,465 U.S. dollars) per year.

Forecasts included in the budget projected that those cuts would cost 95 billion Australian dollars (67.6 billion U.S. dollars) over the six years from their planned introduction in 2024-25 but the PBO found they would cost 147.2 billion Australian dollars (104.8 billion U.S. dollars), jeopardizing the surpluses projected by Frydenberg.

Chris Bowen, the opposition Australian Labor Party's (ALP) treasury spokesperson, said that the PBO analysis proved the true impact of the plan on Australia's finances.

"(Prime Minister) Scott Morrison has famously repeated in the last week his view that income tax cuts aren't a 'cost' to the budget," Bowen told Fairfax Media on Tuesday.

"That underscores just how fiscally reckless the Liberal Party is, locking into the budget, massive tax cuts for high-income earners.

"This says all Australians need to know, not just about the competing choices and priorities at this election, but how the Liberals will stop at nothing to implement their ideological, flat tax agenda."

The ALP has committed to supporting the first stage of the tax plan, which includes cuts for low-income workers, but has ruled out doing so for either stage two, which will benefit middle-income earners, or three.

Labor's own economic agenda, which Bowen will explain further detail in a speech to the National Press Club on Wednesday, features larger tax cuts to Australians earning less than 40,000 Australian dollars (28,492 U.S. dollars) per year.