Scott Morrison has another tax plan – one he says is big enough to buy a new set of tyres for your car, your car rego or one of your quarterly electricity bills.
His latest is a personal income tax plan over seven years to boost a worker’s take-home pay and by up to $530 in the first year.
This is while a large proportion of a 10-year tax plan for business from the federal treasurer’s first budget still languishes in the Senate.
But both plans could disappear if opinion polls are right and Labor wins the next federal election due in the coming 12 months.
Shadow treasurer Chris Bowen said Labor would support the initial tax cuts that start on July 1 but said promises of tax cuts out in 2024 were a “hoax”.
“You will have to re-elect Malcolm Turnbull twice to get that tax relief. It is ridiculous to say the tax cut will be in place in 2024,” he told ABC television on Tuesday after Mr Morrison handed down his third budget.
Armed with an unexpected revenue windfall, Mr Morrison is banking on a balanced budget in 2019/20 – a year earlier than expected – and a comfortable $11 billion surplus in 2020/21.
For the next 2018/19 financial year, the deficit is forecast at $14.5 billion compared to the $20.5 billion shortfall predicted by Treasury in December.
“This will be the best budget outcome since the Howard government’s last budget a decade ago,” Mr Morrison told parliament.
‘s national finances have been in deficit since the 2008-2009 global financial crisis, despite the efforts of consecutive governments and treasurers on both sides of the political divide.
Global credit rating agency Standard & Poor’s, which has on its top-tier triple-A rating on a negative outlook, said the government has shown a commitment to “fiscal prudence”.
“These developments have helped ease the negative pressures on the n sovereign ratings,” it said in a statement.
Avid budget watcher and economist Chris Richardson told AAP the government has been “pretty restrained” given it is behind in the polls and faces an election in the next year while receiving a $35 billion tax revenue windfall over the next four years.
Treasury’s forecast for domestic economic growth nudged up to 2.75 per cent for this financial year 2017/18, from 2.5 per cent.
However, Treasury is sticking with three per cent for each financial year thereafter, ignoring the recent central bank forecast of 3.25 per cent growth.
Consumer confidence has been rising in the past month in anticipation of Mr Morrison producing tax cuts in this budget.
His latest tax plan kicks off with tax relief for low and middle-income earners of up to $530 a year.
Also from July 1, the 32.5 per cent tax bracket threshold will be increased to $90,000, from $87,000, which save 210,000 people from having to pay 37 cents in the dollar due to bracket creep.
More changes are planned in 2024/25, when the government proposes abolishing the 37 per cent tax bracket altogether – as part of the seven-year plan, which Mr Morrison insists will be presented to parliament as “a package” on Wednesday.
The treasurer told reporters in the budget lock-up the plan will cost $140 billion over ten years, a figure that is not in the budget papers.