Mathias Cormann has not ruled out bringing forward already-legislated personal income tax cuts.
But the finance minister says people should not expect such a major change to be included in next month’s mid-year budget review.
The bosses of the nation’s two largest banks – Commonwealth Bank of Australia and Westpac – believe it is worth considering bringing forward the tax cuts that are due to start in July 2022.
These cuts include raising the threshold of the 19 per cent marginal tax rate from $37,000 to $41,000 and threshold for the 32.5 per cent rate from $90,000 to $120,000.
The banks’ respective, independent economic research teams have both urged the Morrison government to take such action to stimulate the economy as the Reserve Bank runs out of ammunition.
The cash rate is already at a record low of 0.75 per cent after three rate cuts this year,
“We need businesses to invest, consumer spending is slow,” Westpac CEO Brian Hartzer told the House of Representatives economic committee in Canberra on Friday.
“So I do think it’s certainly sensible to be having a debate about what sort of policies might help get things growing faster.”
Commonwealth Bank CEO Matt Comyn separately told the hearing that he saw “some merit” in bringing forward those tax cuts.
“In my mind, there is no doubt that tax cuts have a positive stimulatory effect on the economy and clearly what we need at this point in time is income growth,” Mr Comyn said.
Senator Cormann told Sky News when there is an opportunity, the government will always err on the side of providing further tax relief.
“That is our track record and that is what we would intend to do in the future,” Senator Cormann said.
“I wouldn’t interpret this as giving any indication of things to come in a half-yearly budget update, which is just an update.”