- The Morrison government is considering new economic support as it looks to cut the $70 billion JobKeeper wage subsidy program.
- On Wednesday, Treasurer Josh Frydenberg revealed that the fast-tracking of personal tax cuts is on the table.
- Frydenberg also said a new income support program was on its way and would be announced during his budget update to be handed down on July 23.
- Visit Business Insider Australia’s homepage for more stories.
As the pandemic winds on, the Morrison government is looking to a new set of policies to see Australia through its first recession in nearly thirty years.
On Wednesday, Treasurer Josh Frydenberg gave the first indication of what the next generation of coronavirus relief might look like, as the Coalition tries to ween workers off the $70 billion JobKeeper program.
Personal tax cuts could be the first carrot on offer, with Frydenberg indicating Treasury will consider fast-tracking the stage two cuts originally scheduled for July 1, 2022.
“We are looking at that issue and the timing of those tax cuts because we do want to boost aggregate demand, boost consumption, put more money in people’s pockets, and that’s one way to do it,” he told ABC Breakfast, noting the Victorian lockdowns could cost the economy $1 billion a week.
The second stage of cuts, legislated well before anyone had even heard of COVID-19, could be hauled forward to this financial year.
Under the current arrangements, income up to $41,000 is taxed at 19.5%, with income up to $90,000 taxed at 32.5%. These thresholds would be lifted to $45,000 and $120,000 respectively under stage two of the cuts.
Under the third stage of cuts, currently slated for 2024, all income between $41,000 and $200,000 will be taxed at a flat rate of 32.5%.
The second policy broached by the Treasurer on Wednesday looks to be more significant, but also less clear at this stage.
The Treasurer indicated “another phase of income support” was to be announced as part of the budget update which will be be handed down on July 23.
“It will be targeted, it will be temporary and will be designed to get help to people who need it most,” he said in a separate interview with ABC Radio.
It comes on the same day the country’s banks made a renewed commitment they would continue to freeze repayments on mortgage and business loans until January for those customers who need it.
With both the $70 billion JobKeeper program and boosted JobSeeker payment scheduled to end in September, the government has to this point done little to allay concerns the country is headed for a “fiscal cliff” when they wind up.
Frydenberg’s 23 July budget update will be the first formal overview of where Australia’s economy is at in months, after the May Budget was scrapped due to the substantial uncertainty created by the coronavirus.
The breadcrumb trail the Treasurer laid out on Wednesday marks the first real suggestion that further economic help is on its way.
Where that trail leads exactly is yet to be determined.
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