Prime Minister Scott Morrison has vowed to pursue lower taxes as one of his fundamental goals in the recovery from the pandemic, preparing for an election fight on the economy by warning against “busy-body” intervention by a Labor government.
Mr Morrison named tax as a key issue in a warning that the economic recovery could not be taken for granted, amid forecasts of an improvement in the budget to be revealed within days.
PM Scott MorrisonCredit:Alex Ellinghausen
“Our economy is primed for growth. But securing our economic recovery in 2022 cannot be taken for granted,” he said on Monday night.
“We must continue to get the fundamentals right – lower taxes, less regulation and sound public financial management.”
The government is expected to gain more fiscal room to announce personal tax cuts before the federal election when the mid-year budget update is released this Thursday, with Deloitte Access Economics forecasting a $103 billion improvement in deficits over four years.
Labor leader Anthony Albanese challenged the government to extend a tax offset for about 10 million workers worth up to $1080 a year, known as the Low and Middle Income Tax Offset and due to end next financial year.
“If something doesn’t happen, then what we know is that people will get a tax increase in July next year,” Mr Albanese said on Monday.
“This is a government whose focus is always just on the electoral. They don’t have a focus on the economic needs. There’s no big economic reform that they’ve put forward.”
Mr Albanese is campaigning in marginal electorates with a promise to spend $1.2 billion more on skills, while Mr Morrison talks about “economic beachheads” including the digital economy, net zero emissions by 2050, manufacturing and stronger research.
With some Labor premiers extending pandemic restrictions out of concern about the Omicron strain of the coronavirus, the Coalition is trying to tap into voter frustration by promising to ease rules and get the government out of their lives.
Mr Morrison told the Sydney Institute that his opponents on the left would draw “precisely the wrong lesson from the pandemic” by pursuing a more expansive government role and a reach into society in economic, social and cultural policies.
“This would be a profound misjudgement, in light of both our liberal democratic inheritance and what now lies in front of us as we secure our recovery,” he said.
“The reach of government in this pandemic is not some new norm; it has a use-by date.
“By instinct more than ideology, Australians support effective, practical yet limited government: an enabling partner, not a meddling, busy-body overseer.
“Where government delivers the essential services that Australians rely on, while also keeping their tax burden down as much as possible.
“Where the state facilitates, rather than dictates. Knows its role, but also knows its place.”
Mr Morrison acknowledged the government did not get everything right in the pandemic but did not admit to specific mistakes, saying the government had spent $33 billion more on health and saved 40,000 lives – a claim based on applying death rates seen overseas to the Australian population.
“In a crisis what matters is not that you have setbacks, but that you overcome them,” he said.
“And we did, clawing back the ground lost by early non-delivery of vaccines from overseas, and restrictions placed on the AstraZeneca vaccine.”
Mr Albanese blamed the government for being too slow to deliver vaccines and hurting the economy as a result.
“The supply of vaccines was the big problem that we had. Scott Morrison said that it wasn’t a race. We know, as a result, it is why those lockdowns have continued to occur and why the borders were closed,” the Labor leader said on Monday.
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