2 May 2016

Major changes tipped for Australia's tax system

12:46 pm on 2 May 2016

Australian Prime Minister Malcolm Turnbull says there will be "substantial" changes to the tax system in tomorrow night's budget, as MPs prepare for what is expected to be the final week of Parliament before the election is called.

Australian Prime Minister Malcolm Turnbull

Australian Prime Minister Malcolm Turnbull Photo: AFP

Treasurer Scott Morrison has confirmed wealthier Australians will pay more tax on their superannuation, but that there will be some relief for those pushed into higher income tax brackets by inflation.

"We're not fiddling, this is going to be a critically important economic document," Mr Turnbull told Sky News.

"There is substantial tax reform, or tax changes, in the budget."

The prime minister has also sought to make a clean break from the Coalition's deeply unpopular 2014 budget, saying Mr Morrison would be presenting "more than a usual budget" and "a new agenda" to take to the election.

"This is not Tony Abbott's plan, this is the plan of the Turnbull Government," Mr Turnbull said.

"It is a plan to ensure jobs and growth and a sustainable tax system, and the restoration of the budget to balance, bringing those deficits down in a managed and measured way so that we … live within our means."

The prime minister also promised a re-elected Coalition government would not make any change to the Goods and Services Tax (GST) in the next term of parliament.

It was considered and rejected by the government earlier this year.

"No government should, and frankly I don't think any government would contemplate making a change as big as that without taking it to an election," he said.

The Treasurer will hand down the budget tomorrow night, the Opposition Leader will give his reply speech on Thursday and the ABC has been told Mr Turnbull will call the election on Friday or Saturday.

'You can't fatten the pig on market day'

As politicians flew into Canberra yesterday the election was top of mind.

Labor frontbencher Anthony Albanese said voters did not want the looming marathon campaign.

"No, they don't, this has been forced upon them by an incompetent government that has no idea how to run the Parliament, let alone how to run the country," he said.

Liberal frontbencher James McGrath said the budget would be focused on creating jobs and growth and ensuring Bill Shorten does not win the election.

"I think the four scariest words in the English language are 'prime minister Bill Shorten'," Senator McGrath said.

Queensland Liberal National MP Scott Buchholz said he would not be bombarding voters during the campaign.

"You've either done the work or you haven't and you know what? You can't fatten the pig on market day," he said.

Retiring Liberal Bob Baldwin took a parting shot at his own side for the procession of ideas floated and abandoned on tax reform.

"I think that people are looking for a budget that paves a way for the future and I think the time for a lot of thought bubbles on both sides have got to end," he said.

Turnbull defends decision to abandon White Paper

The government had originally planned to release its proposed tax changes in a White Paper policy document earlier this year.

The prime minister has defended the government's decision to abandon the White Paper and wait until the budget.

"It's very hard to propose tax changes months before the budget because everything's got to add up in the budget," Mr Turnbull told Sky News.

"The Treasurer has to bring it all together on budget night, so it all adds up and he can demonstrate that the tax changes he's making are going to deliver the revenues, or promote the growth he's forecasting."

Yesterday the government revealed the budget would include an extra $1.2 billion worth of school funding - still falling short of Labor's school funding promises.


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