Under the proposed tax reform, middle-income earners could pocket an additional $2,565 a year, as tax changes proposed for 2022 are brought forward.

On Wednesday, 8 July, Mr Frydenberg was asked about bringing forward the second phase of the government’s tax cuts, which lifts the income threshold at which the 19 per cent tax rate applies from $41,000 to $45,000, and the rate at which the 32.5 per cent rate applies from $90,000 to $120,000.

The Treasurer said the creation of “one big tax bracket” was already clear, and cabinet will consider bringing the cuts forward in coming weeks.

“We are looking at that issue and the timing of those tax cuts,” he told ABC radio.

With consumer spending making up more than half of Australia’s GDP, the Treasurer highlighted how changing the tax rate could help the national economy.

“We are looking at that issue and the timing of those tax cuts because we do want to boost aggregate demand, boost consumption, put more money in people’s pockets, and that’s one way to do it,” Mr Frydenberg said.

Opposition Treasurer Jim Chalmers responded to Mr Frydenberg’s confirmation that the government was looking at bringing forward the flat tax rate and would be announcing new stimulus measures on 23 July.

“If they want to bring those tax cuts forward, then put a plan on the table and Labor will engage with that constructively and responsibly. If they want to bring tax cuts forward, let’s see what they intend to do,” Mr Chalmers said.

Treasurer refuses to rule out JobKeeper extension

The Treasurer did not announce whether he would extend the $1,500 a fortnight JobKeeper subsidy, which is due to expire at the end of September.

But he did flag that more income support beyond September for struggling businesses was now likely as a second wave of COVID-19 cases hit Victoria.

It follows calls from Victorian Premier Dan Andrews to extend JobKeeper or other forms of income support due to Melbourne having to go back into lockdown.

“The first thing to say is that the JobSeeker and JobKeeper programs are already legislated to the end of September. So, even with the six-week lockdown announced by Premier Andrews, that takes it out to the end of August,’’ Mr Frydenberg said.

“But after that, there’s going to be that really awkward and tough reopening measures again, which might last a couple of months past that.

“Yes, and there’s going to be another phase of income support. The details of which will be announced on July 23. We recognise that some sectors are going to recover more slowly than others. For example, the tourism sector as a result of the international borders being closed. We’ve announced a number of sector-wide specific packages for housing, for the arts, for tourism,” he said.

Mr Frydenberg thanked the banks for agreeing to extend support after concerns were raised about a September economic cliff due to the legislated end of the JobKeeper payments coinciding with the end of loan deferrals.

“The government acknowledges and thanks the banks, APRA and ASIC for their collective efforts in support of Australians who are facing financial hardship during this difficult time,” Mr Frydenberg said.

Australian Banking Association chief executive Anna Bligh said over 800,000 people had now deferred over $260 billion worth of loans since repayment holidays were rolled out back in March.

“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially,” Ms Bligh said.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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