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Frydenberg committed to 2024 tax cuts

Josh Frydenberg is “absolutely fully committed” to going ahead with his stage three personal income tax cuts due in 2024, but has yet to make a decision on what the dole payment rate will be at the end of the year.

The treasurer describes stage three – which gets rid of the 37 per cent bracket and reduces the 32.5 per cent bracket down to 30 per cent that creates one tax bracket between $45,000 and $200,000 – as a “big structural reform”.

“This is a very important reform to create a stronger, fairer tax system,” Mr Frydenberg told ABC television’s Insiders program, confirming they come at a cost to the budget of just $130 billion.

Asked why he didn’t bring forward stage three tax cuts to last week’s budget as he did with stage two, Mr Frydenberg said he wanted the “biggest bang for our buck”. Stage two is aimed at low and middle income earners.

Opposition Leader Anthony Albanese jumped on the comment, questioning the whole economic policy of the government.

“They don’t have a strategy to grow back the economy,” he told reporters in Adelaide.

The government has yet to decide what rate people on the dole payment will get when the JobSeeker coronavirus supplement ends at the end of the year, because it wants to see where the economy is at the time.

“I have said that we are leaning in to ensure that there is continued support for those who are on JobSeeker,” Mr Frydenberg said.

His budget last week included the bringing forward of stage two tax cuts worth $158 billion aimed at stimulating the economy out of its first recession in nearly 30 years.

The cuts – originally legislated for 2022/23 but now backdated to July this year – were quickly passed by the parliament.

But a survey by left leaning The Australian Institute, which had been critical of the tax cuts in the run-up to the budget, found more than three-quarters of respondents intend to save at least half of their tax saving.

Still, 58 per cent of respondents believe the budget will be good for the economy, compared with the 44 per cent who responded positively to Mr Frydenberg’s 2019/20 budget.

The treasurer revealed a record $213.7 billion budget deficit for 2020/21, dwarfing the previous peak of $85.3 billion in the previous financial year.

It will see gross government debt top $1 trillion in 2021/22.

Shadow treasurer Jim Chalmers says it is “laughable” the government is now questioning Labor’s proposed spending.

In his budget reply speech, Mr Albanese announced a Labor government would reform child care at a cost of $6.2 billion, drawing calls from the government as to where the money would come from.

“It’s absolutely laughable. This is a government that has racked up a trillion dollars in debt,” Dr Chalmers told Sky News’ Sunday Agenda program.

“They announce $98 billion in new spending … which wasn’t offset, and now we have this stupendous hypocrisy that a tiny fraction of that, a $6.2 billion commitment, needs to be immediately offset.”

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