Australia Prime Minister Anthony Albanese has announced plans to consult lawmakers for modifications to proposed tax cuts for higher earners, potentially deviating from an election pledge. The existing legislation aimed to eliminate a 37% tax band for those earning A$120,000 to A$180,000 and apply a 30% tax rate to income between A$45,000 and A$200,000, replacing the current 32.5%.
The new proposal, as reported by local media, retains the 37% band while redirecting the savings to middle and low-income earners. Economists express concerns about potential inflationary impacts, as the revised changes might stimulate spending. The Finance Ministry asserts the modifications would be budget and inflation-neutral. This move could have repercussions on interest rate decisions and impact political standing, considering the Prime Minister’s earlier commitment to retain the tax cuts.