Treasury to open goodie bag for Budget

Reducing cost-of-living pressures is expected to be the primary focus of tonight’s Federal Budget.

With an election just around the corner, it’s expected the government will have sweeteners on offer.

Although we won’t know the full details of the Budget until 7.30pm, federal Treasurer Josh Frydenberg provided some teasers during his traditional pre-Budget press conference at Parliament House this morning.

He announced that the fuel excise would be cut from midnight, although was still quiet on by exactly how much. The Daily Telegraph is reporting that the tax could be cut by as much 20 cents per litre.

Read: Spiralling petrol costs fuel inflation fears

“If you’re a family who needs your car to get to and from work, to drop your kids at school; if you’re a tradie [and] busy getting about a daily job, you are seeing the higher price for petrol and what it’s doing to your take-home pay,” Mr Frydenberg said.

“And so what we will be seeking to do in this Budget is provide cost-of-living relief for those Australians who are paying higher prices at the bowser.”

As so much of the petrol price is tied to the global price of oil, it’s not clear how much relief this excise cut would provide as a continuing rise in the oil price could eliminate any savings made.

Read: Supermarket prices to rise even higher as diesel price soars

“What the government is proposing could be wiped out almost overnight,” Greens senator Nick McKim told SBS.

“This proposal might end up making little or no difference to prices at the petrol pump.”

Also expected is a small cash payment to those earning under $126,000 of between $250 and $400. The payment is meant to ease the burden of the expected removal of the low- and middle-income tax offset (LMITO) in the next financial year.

Crucially, you can still claim the LMITO in your 2021–2022 tax return. Worth up to $1080 at tax time, the LMITO was originally introduced as a temporary measure but was extended several times through the pandemic.

Read: Tax rise in Budget being considered for everyday Aussies

Prime Minister Scott Morrison dismissed Opposition criticism of the Budget, saying the economic circumstances of the times demanded measured and responsible action.

“That immediate relief that is required to deal with the very real cost-of-living pressures that are on Australian families and are on Australian businesses, particularly small businesses right now,” he said on Monday.

“The impacts on fuel prices and things like that is really causing some great concern to people. And the Budget on Tuesday night, the Treasurer will hand down, will provide that immediate relief, but that’s part of a balanced and responsible plan.”

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Brad Lockyer
Brad Lockyer
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.
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