The federal government has indicated that it will junk its ‘temporary’ $1080-a-year tax offset for low and middle-income earners as it seeks to counter act rising inflationary pressures across the economy:
There are increasing concerns within the government, which faces budget deficits for the rest of the decade and gross debt surpassing $1 trillion by 2024-25, that while extending the offset for another year may be vital to the Coalition’s re-election chances, it could come at a huge economic cost.
The offset, worth up to $1080 and available to people earning less than $126,000 a year, has been extended by Treasurer Josh Frydenberg in his past two budgets. On both occasions, he said the offset would be important to supporting the economy through the COVID-19 recession, describing it as a stimulus measure.
