Australian government close to securing enough votes for $110 billion tax cut plan
About 10 million middle and low-income earners will receive a rebate worth up to A$1,080 ($746.28) per person should the legislation pass this week.
Australia’s conservative government is close to securing enough votes to pass sweeping tax cuts after independent lawmakers said on Tuesday they were poised to strike an agreement with Prime Minister Scott Morrison. Australian Treasurer Josh Frydenberg proposed in April A$158 billion ($110 billion) in tax cuts over the next decade, primarily aimed at middle-income earners. That was on top of tax cuts of A$144 billion last year.
The plan, widely sought amid a slowing economy, needs the support of three independents and minor parties to become law after the main opposition Labor party said it would oppose the legislation in Australia’s upper house Senate, where the government does not have a majority. Senator Stirling Griff said his Centre Alliance party was close to committing the final two votes the government needs to pass the bill.
“It’s getting close,” Griff told Australian Broadcasting Corp. Radio. “We’re 100% behind income earners getting an extra boost in their pay packet.” A conservative independent lawmaker has already committed to supporting the legislation.
About 10 million middle- and low-income earners will receive a rebate worth up to A$1,080 ($746.28) per person should the legislation pass this week.
The tax cuts would be a welcome relief to Australia’s central bank, which has said government action was needed to boost consumer spending in order to revive an economy that is growing at its slowest in a decade.
Economists have estimated the tax breaks would inject about A$7.5 billion into the economy over 2019/20. The Reserve Bank of Australia (RBA) will meet on Tuesday, when a second interest rate cut in two months is possible. While economists believe the RBA will cut interest rates to an historic low of 1.00% on Tuesday, Australia’s top central banker has said monetary policy is not the most effective tool to boost economic growth.