Fresh analysis today from the independent Parliamentary Budget Office has revealed low and middle-income income earners will suffer the fastest-growing tax burden under the Liberals and their unfair policies.
 
The PBO’s review of medium-term Budget projections points out:
 
“Our distributional analysis highlights that the largest increases in average tax rates occur in the low- to middle-income groups.”
 
(2018-19 Budget: Medium term projections, 6/9/18)
 
According to the PBO, those towards the lower to middle end of the income scale were projected to carry a heavier burden.
 
The PBO has warned the Government’s projected return to surpluses over the medium term was predicated on “a return to close to trend wages growth by the end of the forward estimates period”.
 
The warning comes after yesterday’s National Accounts revealed profits were growing more than five times faster than wages, with average compensation per employee only growing 1.6 per cent for the year – well below inflation.
 
On company tax cuts, the PBO report highlights the fiscal recklessness of the Government’s plan, which would leave the country less equipped for a downturn.
 
As the PBO points out, by abandoning their company tax plan, the Liberals are likely to breach their arbitrary tax cap – an incentive to resurrect their big business tax handouts after the election.
 
The PBO’s report is another damning indictment on the divided and dysfunctional Liberals’ inability to manage the economy in the interests of middle Australia.
 
Under the Liberals, low- and middle-income earners are slugged with the fastest-growing tax burdens, wages growth is stagnant, and the biggest tax concessions are gifted to those who need them the least.
 
At a time when wages are growing at record lows and households are struggling to keep pace with the cost of living, now is not the time to be prioritising tax relief at the top end.
 
Labor’s plan for the economy is focused on boosting wages by restoring penalty rates and ending unfair labour hire practices, and providing a bigger, fairer tax cut for workers.
 
Only Labor can be relied upon to manage the economy in a fair and responsible manner and to deliver a fairer tax system for all Australians.