Budget to splash the cash for 10 million low and middle-income earners

Up to 10 million low and middle-income earners will get an extra cash payment when they lodge their tax returns this July as a centrepiece of today’s Budget to be unveiled by Treasurer Josh Frydenberg.

With today’s economic update to include the first surplus in more than a decade, cash hand-outs for pensioners, a multi-billion-dollar infrastructure package and more health and education spending, the Federal Government is also planning to boost the amount offered in this year’s tax offset to workers to help with cost-of-living pressures.

Ten million workers earning between $37,000 and $125,000 are in line for the additional lump-sum payment, which comes on top of a maximum payment of $530 revealed in last year’s Budget.

An estimated 4.4 million workers earning between $48,000 and $90,000 are in line for the biggest cash bonus, with the amount reducing gradually for those earning up to $125,000.

Mr Frydenberg told The West Australian ahead of today’s economic update that he wanted to see more money in the pockets of Australians, with the Coalition to use the tax bonus to contrast with Labor’s higher taxing platform.

“It will help frame the contest at the next election,” the Treasurer said.

“It will be about what kind of nation the country wants over the next decade.

“My priority is to get the policy settings right to balance the books, to grow the economy and to guarantee the essential services all without increasing taxes.”

Prime Minister Scott Morrison said the Government would post a Budget surplus — the first in 12 years — because it had been able to keep spending under control.

He said given the improved state of the books, Australians should share in the windfall.

“I don’t think it’s an unreasonable thing to do to ensure that when your Budget has performed better than you set out the year before, that the benefit of that actually is shared with Australians, whether they be pensioners or others to receive at least some assistance to deal with their cost-of-living pressures,” Mr Morrison said.

Finance Minister Mathias Cormann said yesterday that the Coalition was committed to keeping the tax-to-GDP ratio at 23.9 per cent, obliging the Government to ensure tax cuts were offered as revenue increased.

He pointed to “conservative” forecasts for commodity prices, and said the Government was on track to outperform its Budget forecasts for the current financial year, giving it the ability to offer tax cuts.

“A tax cut is a decision by Government to leave Australians with more of their own money — money that they have earned,” Senator Cormann said. “It is a decision by Government to take less money out of people’s pockets.”

Opposition Leader Bill Shorten yesterday left open the option of matching the Coalition’s pre-election sweeteners but said Labor was offering “bigger, fairer tax cuts”.

“This is not an economic document, it’s a political leaflet by a Government asking you to forget the last six years of division and disunity,” he said.