Australians appear to be getting excited about the Turnbull government’s promised personal income tax cuts.
With seven days to go until Treasurer Scott Morrison’s third budget, consumer confidence rose for a third straight week to an 11-week high.
The weekly ANZ-Roy Morgan confidence index released on Tuesday rose a further 0.7 per cent.
ANZ head of Australian economists David Plank believes sentiment is being lifted by expectations of personal tax cuts and some easing of geopolitical tensions between North Korea and South Korea.
He expects a tax cut for low and middle-income earners will be modest.
‘Even so, this should provide some support to household spending, particularly since wage growth is expected to improve only gradually,’ he said.
The government’s latest pre-budget announcement on Tuesday was $65 million over the next four years for the creation of a national data commission to work alongside the Australian Privacy Commissioner to oversee access to government-held data and ensure the protection of individual privacy.
As Mr Morrison puts the final touches to what is likely his final budget before the next federal election, Labor launched another attack on the state of the nation’s finances under a coalition government.
Addressing Griffith University, opposition finance spokesman Jim Chalmers says the economy and the budget should both be in a far stronger position as Australia enjoys one of its biggest tax revenue surges in history and the best global conditions in a decade.
‘With strong global growth, there is no excuse for these fiscal failures,’ he argues.
‘Right across the budget Australia is under performing … we’ve gone from leader to laggard.’
The government will preside over a far bigger deficit than predicted in its first budget in 2014, while gross debt has crashed through half a trillion dollars with no peak in sight.
He believes Labor has demonstrated the budget bottom line can be improved while at the same time making it fairer.
These include changes to negative gearing, capital gains tax, dividend imputation, while encouraging businesses to invest and cracking down on companies who operate outside of the law.
‘Big, progressive structural reforms are necessary because it’s possible under the current fiscal settings that we could just pass into surplus and then fall back into deficit quite easily,’ he said.