Since Labor won the election, the treasurer, Jim Chalmers, has been hosing down expectations of an economic turnaround. Wage growth isn’t likely in the near term, inflation is expected to hit 7.75% by the end of the year, and the budget is “a trillion dollars in debt”.
Those economic challenges make it hard to see how the government can hold on to the Morrison government’s stage three tax cuts. Ultimately passed with Labor’s support, the stage three cuts create a flat tax rate of 30 cents in the dollar for anyone earning between $40,000 and $200,000, abolishing an entire rung of Australia’s progressive income tax ladder.
Getting rid of them is not something Labor is entertaining at present. But what if they were scrapped? What if there was an extra $243bn in the budget over the next 10 years? What could be done?
