Business groups say it is vital personal income tax cuts are passed quickly to drive economic growth.
Labor supports the first part of the Morrison government’s tax plans, which will provide more tax relief for low and middle-income earners.
But it’s unsure about the later stage of the government’s package, which will flatten the tax rates schedule by mid-2024.
Treasurer Josh Frydenberg wants parliament, which is scheduled to open on July 2, to quickly pass the package as a whole and is not considering splitting it to get Labor’s support.
He says the whole package was endorsed by the Australian people at the May 18 election and would be delivered as promised, also rejecting the idea of bringing forward the timing of the later stage of cuts.
It would take just days after the laws are passed for the Australian Tax Office to make the changes for the first stage of the tax plan, through which low and middle income income earners will get to keep up to $1080 more of their pay, he says.
Business Council chief executive Jennifer Westacott said the economy was not growing fast enough to deliver higher wages and better job opportunities.
“We need to pull out all stops to accelerate our rate of growth,” she says.
“Personal income tax reform to deal with bracket-creep and put more money in the pockets of everyday Australians are a good start – now we must act to implement a long term growth agenda.”
Australian Chamber of Commerce and Industry chief James Pearson said many small businesses are doing it tough due to weaker consumer spending.
“The Reserve Bank Board’s decision to lower the cash rate to 1.25 per cent was timely and it is important that the government’s planned personal tax cuts are passed when parliament resumes in July,” he says.
As well, business and industry needed simplified workplace rules, greater investment in vocational education and training and a cut to power prices, he said.
New figures showed Australia’s economy grew by a modest 0.4 per cent in the three months to March and by 1.8 per cent in the previous 12 months.
That is the weakest growth throughout the year since September 2009 – during the global financial crisis.
Shadow treasurer Jim Chalmers says Labor is still waiting on information from the coalition on how much of the later tax cuts will flow to the higher income earners.
Crossbench senators, who could deliver the package if Labor decides to block it, are being given briefing with senior officials.