Why bringing forward tax cuts is a bad idea

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Liberal MPs have intensified calls to bring forward $143 billion in personal tax cuts to lift household income and stimulate the economy:

“The only thing better than a tax cut is an early tax cut,” Victorian Liberal senator James Paterson said. “If we want Australians to lift their heads and look towards the future with confidence and optimism, bringing forward our planned personal income tax cuts is a great way to do it”…

South Australian Liberal James Stevens said… “Every dollar we put back in the pockets of Australians is a dollar they can spend in the Australian economy,” he said. “Bringing forward the legislated tax cuts would have my strong support.”

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.