As Treasurer Scott Morrison draws up his second budget, Labor is urging him to keep the budget deficit levy on the wealthy in place as the nation’s finances are still in the red.
The temporary levy, a two percentage point increase imposed on the top marginal tax rate, was introduced in 2014 by Mr Morrison’s predecessor to help get the budget back on an even keel.
It is due to end on June 30.
Opposition finance spokesman Jim Chalmers said it will be the equivalent of a $16,400 a year tax cut for millionaires when it comes off at a time when the budget remains deep in the red.
“If that deficit levy was necessary in 2014 when the deficit was only $11 billion it is more than necessary now that the deficit is $37 billion,” opposition finance spokesman Jim Chalmers told ABC television on Sunday.
“We call on the government … to pay for their priorities in a much fairer way that doesn’t see them go about it attacking people on family tax benefits and taking money out of the pockets of people on middle and low-incomes.”
Federal politicians head back to Canberra for the final sitting week before the May 9 budget.
The government’s 10-year company tax cut plan from the last budget is expected to pass the lower house on Monday, but the $50 billion policy may find it reduced to just small businesses when it gets to the Senate.
The Fair Work Commission’s decision to cut Sunday penalty rates is also expected to be a hot topic of debate.
Dr Chalmers said the cuts to penalty rates will obviously hurt people on low incomes, but also the budget because it will lower the income tax take and increase social security payments.
“These penalty rate cuts won’t just cost people up to $77 a week, they will also cost the budget hundreds of millions of dollars,” he said.
Greens MP Adam Bandt said winding back unfair tax breaks could save the billions of dollars a year to properly fund child care, schools and renewable energy.
“The government just doesn’t seem to get it … they are still intent on raising money off the back of people who can’t afford it … while the top end of town gets away with murder,” he told ABC television.
Tackling housing affordability will be the centrepiece of this year’s budget, a challenge both Labor and the Greens say should be approached by limiting property tax concessions.
“It means saying to people who own three or four homes already, ‘Look, we can’t continue to subsidise you to buy more and more properties, especially at a time when first home buyers are being locked out, that’s costing the budget too much’,” Mr Bandt said.