ABC News Daily The surprise tax cut in the pre-election budget
Mar 25, 2025
Ian Verrender, ABC's Chief Business Correspondent, dives into the recent pre-election budget that introduces modest tax cuts for average workers. He discusses the $17.1 billion commitment and its implications for household finances. The conversation covers a new housing strategy and energy rebates designed to ease the cost-of-living pressures. Ian also highlights the challenges of ongoing deficits, the unpredictability of forecasts shaped by global events, and the balancing act Labor faces in managing the economy amidst financial uncertainty.
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Modest Tax Cut, Big Cost
- The new tax cuts are modest, about $10 a week or $500 annually.
- While seemingly small, the total cost to the government over five years is $17.1 billion.
Tax Cut Benefits
- The tax cuts benefit everyone, particularly lower-income earners.
- The tax rate where taxes kick in will drop from 16% to 15% this year and 14% next year.
Inflation Concerns
- Inflation is currently heading in the right direction, but there are concerns about potential resurgence.
- Global factors, like Trump's tariff policy and central bank struggles, contribute to this concern.