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The Guardian - AU
The Guardian - AU
National
Amy Remeikis

Majority of Australians back sound economic management over keeping promised tax cuts, survey suggests

MPs stand to receive an average tax cut of about $10,000 once the third stage of the package comes into effect
MPs stand to receive an average tax cut of about $10,000 once the third stage of the package comes into effect Photograph: Daniel Munoz/Reuters

Support for the stage three tax cuts remains low with the majority of Australians backing sound economic management over sticking to election promises, a new survey suggests.

The research from the Australia Institute found that high-income earners were particularly likely to support the repeal of the stage three tax cuts, despite being the main beneficiaries of the changes.

The national survey of 1,409 respondents asked about the stage three tax cuts in isolation to the rest of the package. It found that 61% of people believed adapting economic policy to suit changing circumstances was more important than keeping an election promise.

The survey found that 41% of people supported repealing the stage three cuts while half that number (22%) wanted them kept.

Half of the respondents with household incomes above $80,000 supported repealing the stage three cuts. But those in households earning under $80,000 were not as enthusiastic, with just 33% supporting them being axed.

Legislated by the Morrison government, with Labor’s support, the third stage of the 2019 package is due to come into effect from July 2024, likely less than a year out from the next federal election.

The changes will create a 30% flat tax rate for anyone earning between $45,000 and $200,000. The most recent estimate put the cost to the budget at $244bn over 10 years.

Because of their $211,250 base salary, politicians stand to be among those benefiting from the cuts, with an analysis showing MPs stand to receive an average tax cut of about $10,000 once the third stage of the package comes into effect from 2024-25, totalling $3.9m over the forward estimates and $18.6m over the decade.

The federal treasurer, Jim Chalmers, and Labor, have parked the debate, with Chalmers saying he is focused on “the near-term challenges” for the next two budgets. The first is due later this month, with the second to be handed down in May 2023.

Chalmers has often reiterated the government’s position on the stage-three tax cuts has not changed – but he has also been careful not to defend the Coalition’s plan.

The Greens and the crossbench are building the case to scrap the cuts, arguing economic circumstances have changed since 2019, and the budget can no longer afford them.

The executive director of the Australia Institute, Dr Richard Denniss, said the more Australians learned about the stage-three tranche of cuts, the less support they had.

“The research shows most Australians agree that when economic circumstances change, economic policy should change too - even if that means breaking an election promise,” Denniss said.

Chalmers has laid the groundwork for a “bread and butter” first budget, with the government pointing to the “trillion dollars in Liberal party debt” as reasons it can not raise the Jobseeker rate or provide too much relief for the rising cost of living crisis.

Those calling for the stage three cuts to be scrapped now want the conversation focused on how Australia will pay for services, including aged care, early childhood education and the NDIS.

Crossbench senator Jacqui Lambie, who voted in favour of the Morrison government tax cuts in 2019, told the Senate last month she had made a mistake.

Lambie, when she supported the package, said she was passing them so lower income earners could benefit from the stage one and two cuts, and she believed if the economy couldn’t handle the stage three cuts, they would be scrapped.

“I look back at those words now and I think how optimistic I was,” she said.

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