“We’re not fiddling, this is going to be a critically important economic document,” Mr Turnbull told Sky News.
“There is substantial tax reform, or tax changes, in the budget.”
Federal Treasurer Scott Morrison has previously flagged cuts in company tax and has said the budget will clear the way for small and medium-sized businesses and people earning ‘average wages.’
“It’s not a typical budget,” Mr Morrison told reporters in Queanbeyan on Monday morning.
“This is not a time to be throwing money around, you have to spend money wisely.”
Wage inflation is estimated to push 300,000 middle-income earners into the second highest tax bracket, where they will be taxed 37 cents in every dollar they earn over $80,000. The budget measure is designed to tackle this bracket creep, but the ‘sweetener’ has been criticised as the changes won’t affect a large swathe of workers earning less than the threshold.
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“The average full-time earnings in Australia is $80,000,” said Mr Morrison.
The Treasurer has told The Australian his “enterprise tax plan” will channel increased revenue into tax relief aimed at supporting the non-resources sector. The federal government will reportedly fund the company tax cuts through a crackdown on multinational tax dodging.
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Shadow Treasurer Chris Bowen said Labor is leading the policy debate and the Australian people are sick of the coalition’s ‘thought bubbles.’
“Tomorrow night’s budget will be an election document, not an economic document,” Mr Bowen told reporters in Canberra.
Mr Bowen said the multi-national tax policy would likely be very similar to a Labor proposal announced in February 2015.
“If Malcolm Turnbull and Scott Morrison want to run an election campaign based on debate on Labor’s policies, we are all for it,” said Mr Bowen.
The Prime Minister earlier dismissed claims by Labor, that the coalition would make changes to the goods and services tax beyond the federal election. Mr Turnbull said there would be no change to the GST, which is currently levied at 10 per cent, in the next parliament.
“We’ve looked very carefully at the proposal to raise the GST…but we’ve rejected it,” Mr Turnbull said.
The Treasurer will hand down the budget tomorrow night and the Opposition Leader will give his reply speech on Thursday.
