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TAX CUT DELAY: Scott Morrison already breaks election promise

Prime Minister Scott Morrison rubs his chin as he speaks during the 2019 federal election campaign. Image: Getty
Prime Minister Scott Morrison. Image: Getty

Prime Minister Scott Morrison won Saturday’s election with a promise to deliver the world’s most expensive tax cuts, with the cash to begin flowing from this year’s tax season.

However Morrison has been forced to concede that it will be difficult to legislate income tax cuts for 10 million workers before the previously promised deadline of 1 July.

This would see 10 million workers miss out on a promised tax offset of up to $1080 this year, with the payment potentially being delivered retrospectively in next year’s tax season.

“There’s a lot of work to do and we’re getting about it straight away," Morrison told Sky News on Monday.

"We hope to convene the parliament again as soon as we can. We obviously have to wait for the writs to be returned and there’s a formal process for that. At the moment that’s not looking until very late in the back end of June, so that really does make very narrow that opportunity to do it before the 30th of June.

"I think that’s very unlikely with the advice I’ve received."

Morrison decided to hold the federal election on 18 May in April.

As two federal seats are still uncertain, the process of receiving the writs could be strung out. The Coalition looks set to win 78 seats, forming a majority government.

The Coalition announced the ambitious program of tax cuts in its 2018/19 budget, with amendments and additions introduced in April’s 2019/20 budget.

The promise of $158 billion worth of tax cuts within a decade was one of Morrison’s key election policies, as was the $144 billion announced in the 2018/19 budget.

What happens to the promised tax cut?

The Australian Tax Office has said it can deliver the tax cuts retrospectively should the Coalition fail to pass it before 1 July.

"If the Labor party agrees to support the coalition tax cuts as announced, then we would be able to update the tax withholding schedules, to allow the tax cuts to be reflected in people's take home pay," the ATO explains on its website.

However shadow treasurer Chis Bowen has classified the challenge as a broken election promise.

"If the Australian people have to wait another year for the tax cuts, I think it's an indictment on his government and the character of the prime minister," he said on Tuesday. The Labor party had previously agreed to support the touted tax cuts for low and middle-income earners, but stopped short of supporting the LNP’s promised tax cuts for high-income earners.

Morrison and Treasurer Josh Frydenberg are meeting with Treasury Officials, the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority and the Reserve Bank of Australia today as the government considers how to get its tax cuts through parliament for payment from 1 July 2019.

  • With AAP.

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