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Accelerated tax, red tape cuts on the cards ahead of October budget

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
03 September 2020 1 minute readShare
October budget

The government is considering bringing forward $158 billion worth of personal income tax cuts in the October budget following the release of sombre economic figures on Wednesday.

Treasurer Josh Frydenberg has floated several methods to boost jobs and restart the economy, including red tape reduction, boosting skills and business tax relief.

Speaking to media on Thursday, the Treasurer hinted that personal tax cuts due to kick in mid-2022 and mid-2024 are also being considered ahead of next month’s budget.

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“We are considering the timing of those tax cuts, and any announcements would be made in the budget,” Mr Frydenberg said.

“It’s important that people recognise that tax cuts put more money into people’s pockets. More money into people’s pockets means more spending and more spending means more jobs.

 

“But these are still under consideration, so I don’t want to add to the detailed speculation; you’ll have to wait until budget day.”

On Wednesday, data from the Australian Bureau of Statistics confirmed that Australia is now officially in recession following a GDP decline of 7 per cent in the June quarter.

A lot is expected of the October budget to remedy the bleak situation, including measures to stimulate business activity and boost jobs.

The Treasurer explained that since the start of the pandemic, the government’s focus has been on three separate phases: income support, boosting aggregate demand and making it easier for businesses to grow. Stage three, he added, is something the budget will address.

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“How do we make it easier for businesses to grow, to innovate and to hire? How do we make it easier for businesses to do business?” Mr Frydenberg said.

“That is where, without great cost to the budget, you can unlock the entrepreneurship and the innovation of our businesses, and that is about cutting red tape. That is about the industrial relations flexibility. That is about trying to get better systems in place.”

In its recommendations for the 2020–21 federal budget, CPA Australia called for an expansion of JobKeeper to new businesses as the federal government’s extension of the scheme by six months receives parliamentary approval.

CPA’s statement came just hours after the Treasurer confirmed that 1.3 million Aussies will lose the right to JobKeeper beyond 27 September.

The accounting body has not been alone in calling for a JobKeeper change, with Labor urging the government to abandon the tapered and two-tiered system which starts on 28 September.

Shadow treasurer Jim Chalmers said following the release of GDP data, “the cuts to JobKeeper, the cuts to wages, the cuts to super, and the freeze on the pension will make a bad situation worse, not better”.

Accelerated tax, red tape cuts on the cards ahead of October budget
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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