Politics Now A tax cut in Labor's 'battle-ready' budget
Mar 25, 2025
Join ABC political journalist Jacob Greber as he explores Treasurer Jim Chalmers' bold budget move, introducing a $17 billion income tax cut designed to ease bracket creep. Greber analyzes the political strategy behind timing such a significant announcement before the election. He discusses the challenges of inflation on taxpayers and the implications for public perception. Plus, uncover the unintended consequences of high tobacco taxes that have led to a thriving black market and diminishing revenue for the government. It's a deep dive into fiscal policy and its political ramifications!
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Tax Cut Strategy
- The government's unexpected $17 billion income tax cuts aim to shift the political narrative.
- This move seeks to neutralize criticisms about Labor's tax policies and appeal to middle-income voters.
Bracket Creep Explained
- Bracket creep occurs when inflation pushes taxpayers into higher brackets, increasing their tax burden.
- Governments benefit from this increased revenue, while taxpayers become worse off despite pay raises.
Deficit and Tax Cuts
- The government's decision to provide tax cuts amidst a structural deficit raises concerns.
- This approach appears unusual, especially considering the uncertain economic outlook.