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Highlights
- The Morrison government’s half-yearly budget update is scheduled to be delivered on Thursday, 16 December 2021.
- Treasurer John Frydenberg did not comment on tax cuts.
- Ahead of the half-yearly budget, the government has extended its loan scheme for small and medium-sized enterprises for the third time.
More tax cuts could be on the cards as the Australian government increases its economic support amid border reopening. However, Treasurer John Frydenberg refrained from making any specific comments about the same.
Talking to Today show, Frydenberg said, “I’m not going to add to that speculation [on tax cuts] which is scheduled at the end of March next year, but we’ve delivered for the Australian people. We saw in the September quarter alone more than AU$10 billion in tax relief go to more than 11 million Australians. We’ve seen small business taxes come down to their lowest levels in more than 50 years”.
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The speculations of additional tax cuts come in the wake of Mr Frydenberg’s announcement that the Morrison government was ramping up its Covid-19 relief measures by extending its loan scheme for small and medium-sized enterprises for the third time. However, the earlier 80% government guarantee has been cut by 30% and will now drop to 50%. According to the estimates, nearly 24,000 small and medium businesses could take up the benefits of extended loans, capped at AU$5 million per entity.
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As borders are finally reopening in Queensland to fully vaccinated people from NSW, ACT and Victoria, Mr Frydenberg seems confident that no more border closures would take place now, all thanks to the progressive vaccination drive.
“We also know that the vaccine has proven to be a very effective defence against the virus … I’m very hopeful that state premiers will stick to the plan, keep their borders open, and allow Australians to be reunited at Christmas and businesses to flourish.”
The Morrison government’s announcement of extending its loan scheme has come a few days ahead of the government’s half-yearly budget update which is scheduled to be delivered on Thursday, 16 December 2021.
Ahead of the budget, Deloitte Access Economics has released its own forecasts for the upcoming half-yearly budget. The consulting firm said that the Australian economy has been recovering faster than what Treasury estimated seven months back.
More tax cuts in store for Aussies?
In the forecast, Deloitte predicts a deficit of AU$239 billion in the upcoming budget. Deloitte Access Economics partner Chris Richardson said, “Our latest assessment is that Thursday’s budget update will reveal lower cash underlying deficits to the tune of AU$103 billion”.
While Treasury forecasted national income to grow at an annual average rate of mere 2.8% across six-year span, ending 2024-25, Deloitte estimates this measure at 4.2%.
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