Labor wants tax cuts fast-tracked

Labor has proposed fast-tracked tax cuts and infrastructure investment to boost the economy, in a statement issued on Monday.

The party said it would “enthusiastically” support stage one of Morrison’s tax cuts when Parliament resumes next week. Moreover, it urged the government to bring forward the second stage of its income tax plan from the current 2022-23 deadline to 2019-2020.

“Labor calls for the increase of the 37 per cent threshold from $90,000 to $120,000 to be brought forward to 2019-20,” said shadow treasurer Jim Chalmers.

“This would provide up to $1,350 a year to those earning above $90,000 three years earlier than currently planned.”

Mr Chalmers also asked the government to bring forward some of its planned infrastructure investment, as has been proposed by the Reserve Bank of Australia, to create economic activity and jobs in the short term while boosting productivity over the long term.

“We understand our proposals would have budget implications and we want to work with the government to make sure they are implemented responsibly to help grow the economy without jeopardising forecasted surpluses,” said Mr Chalmers.

He noted that if stages one and two of income tax cuts can be agreed, Labor would commit to passing them quickly and seek to defer stage three, which it described as the “most expensive and contentious portion”, until the next Parliamentary fortnight.

“Stage three won’t have the same impact on the economy now. It is five years away and costs $95 billion and we need to take the time to give it proper consideration,” Mr Chalmers said.

The Tax Office explained in April that if the tax cuts law passes after June, it could retrospectively amend assessments to provide the tax cut once the law is passed. 

“If the Labor party agrees to support the Coalition tax cuts as announced, then we would be able to update the tax withholding schedules, to allow the tax cuts to be reflected in people’s take home pay,” the ATO clarified. 

“However, we could not issue assessments based on the tax cuts until these are passed into law.”