Labor says that should the Government lift the temporary deficit levy, it would effectively be handing millionaires a $16,400 annual tax break at the expense of low and middle income earners.
The deficit levy is a two per cent tax on the income of those earning over $180,000 per year. Removing the deficit levy would basically add $16,400 – or $315 per week – to high-income earners.
Opposition finance spokesman Jim Chalmers has called on Malcolm Turnbull to keep the temporary deficit levy instead of freezing the indexation of family payments. The Government intends to freeze family payments so it can pay for its $1.6 billion childcare package.
“They could have raised three times as much money from a third as many families and only impacted largely the top one per cent of earners in this country,” said Mr Chalmers.
“If that deficit levy was necessary in 2014, when the deficit was only $11 billion, it’s more than necessary now that the deficit is $37 billion.
“They’re going to abolish that deficit levy and it will give a huge tax cut to people at the top end.”
Mr Chalmers also questioned the Government’s plan to create $50 billion worth of corporate tax cuts at the expense of Australian families.
“If they do hang onto them, it will be up to Malcolm Turnbull and Scott Morrison to explain to the Australian people why they should wear cuts to family payments or a tax on Medicare at the same time as the Government gives $50 billion to the big banks and multinationals,” he said.
“You can see why people are turning on this Government.”
Should the Government retain the temporary deficit levy instead of penalising low-income families and, if so, for how long? Until the Federal Budget is back in the black?