Australian government aims to win voters with surprise tax cuts
Australia's government introduced new tax cuts on Tuesday and announced additional cost-of-living relief in a major effort to regain the support of dissatisfied voters, pushing the budget back into deficit.
Prime Minister Anthony Albanese's centre-left government is seeking to win a second term in a May election and currently running neck-and-neck in the polls against the conservative Coalition opposition, News.Az reports citing foreign media.
Treasurer Jim Chalmers in his fourth budget also unveiled new efforts to boost economic resilience and competitiveness, acknowledging heightened new global risks from trade wars as well as geopolitical tensions.
"This budget is really a platform for prosperity in a new world of uncertainty," Chalmers said in a press briefing. "It recognises the cost of living pressures are front of mind for many Australians."
In keeping with the practice of recent years, most of the measures announced in the budget had already been flagged.
However, the two new rounds of tax cuts, worth A$17.1 billion ($10.7 billion), came mostly as a surprise and build on those introduced last year.
Through cutting the lowest tax bracket, a worker on average earnings will get a new tax cut of A$268 in the fiscal year ending June 2027 and A$536 per in the following fiscal year, more modest than the A$1,654 relief in the tax cuts introduced this fiscal year.
The budget also features an A$8.5 billion investment in public healthcare. It will also extend electricity rebates until the end of the year, roll out funding for public schools and cut student debt.
That will knock the underlying budget balance for the 2025 fiscal year back into the red after two years of surpluses.
The A$27.6 billion deficit is slightly worse than the government's projection of A$26.9 billion in December. Most analysts had expected an improvement in the fiscal position.
Deficits are expected to widen to a total of A$179.5 billion over the forward estimates.
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