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Economic conditions

Business Calls for Tax Relief Amid Bumper Budget Surplus

Strategic Insights

— 1 min read

The Australian government's mid-year budget update reveals a stronger-than-expected surplus of $A6.2 billion, fueled by increased tax payments from wage and salary earners and companies. This surplus has sparked calls from big business for more tax relief, with the Australian Chamber of Commerce and Industry (ACCI) urging the government to use the surplus to fund tax cuts and reform the tax system. The ACCI is seeking to increase the top personal tax bracket to $A100,000 and bring the top personal tax rate in line with the 30% corporate tax rate.

Key Takeaways:

  • The Australian government's mid-year budget update shows a $A6.2 billion surplus, an increase from the $A5.3 billion forecast in September.
  • The surplus is attributed to an additional $A2.4 billion paid by wage and salary earners and an extra $A1.5 billion in company tax receipts.
  • The Australian Chamber of Commerce and Industry (ACCI) is calling for tax relief, with ACCI chief Peter Hendy urging the government to use the surplus to fund tax cuts and reform the tax system.
  • ACCI is seeking to increase the top personal tax bracket to $A100,000 and bring the top personal tax rate in line with the 30% corporate tax rate.
  • The Australian Industry Group is also urging the government to provide more incentives to work, save, and invest through tax relief for both individuals and companies.
  • The strong budget position is overshadowed by a downgrade in expected economic growth, which is now forecast at 3% this year, lower than almost all of Australia's major trading partners.

Statistics:

  • The government's mid-year budget update shows a surplus of $A6.2 billion.
  • The surplus is comprised of an additional $A2.4 billion paid by wage and salary earners and extra $A1.5 billion in company tax receipts.
  • The accumulated surplus over the next four years is expected to be $A24 billion.
  • The top personal tax bracket is currently set at $A150,000.
  • The corporate tax rate is 30%.
  • Expected economic growth for this year is forecast at 3%.

Sources:

  • Asia Pulse, "Big business calls for tax relief as Budget surplus grows", Dec 22
  • Treasurer Peter Costello's mid-year budget update, citing Peter Hendy, ACCI chief and Senate Estimates, 2022.

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