Australia government set to offer surplus, tax cuts in pre-poll budget
By Colin Packham
CANBERRA, April 2 (Reuters) - Australia's conservative
government is set to offer disenchanted voters tax cuts and
handouts while still delivering the first budget surplus in
more than a decade on Tuesday, just days before it has to call
an election for mid-May.
Armed with stronger tax revenues and higher prices for
commodity exports, Treasurer Josh Frydenberg is expected to
boost infrastructure spending, increase previously announced
personal tax cuts and make some direct payments to voters to
address cost-of-living concerns.
Well behind in political polls, Prime Minister Scott
Morrison is likely to put income tax cuts at the forefront of
his re-election campaign, but will still deliver an anticipated
budget surplus of around A$4 billion ($2.84 billion) for the
fiscal year ending June 2020.
Australia last recorded a budget surplus in the June 2008
fiscal year, before the global financial crisis hit.
"Wherever I get the opportunity to give Australians further
tax relief, I never miss the opportunity," Morrison said late
Frydenberg on Monday said the budget will also remove
restrictions on some retirees topping up their pension savings,
a move widely seen as an attempt to appeal to older voters.
The budget is Morrison's final chance to re-engage voters
alienated by the ousting of his predecessor, Malcolm Turnbull,
in a backbench revolt last year.
An election has to be called within two weeks and the last
possible date it can be held is Saturday, May 18. Elections must
be held on a Saturday and the minimum campaign period after the
vote is called is 33 days.
Morrison's ascension to the top job last year was seen as a
compromise bid to heal ideological differences, but the
government remains fractured and he has been unable to deliver
any legislative victories.
Morrison lost his parliamentary majority late last year
after voters in an affluent Sydney electorate elected an
independent to replace Turnbull, who quit politics.
With government divisions on energy policy and climate
change hampering his legislative agenda, Morrison is expected to
campaign on his government's economic credentials.
Although unemployment is at an eight-year low, the expected
budget cash splash would still be welcome given falling home
prices and weakening consumer spending point to a slowing
Annual economic growth eased to a sub-par 2.3 percent in the
last three months of 2018, while early indicators suggest this
year has started on a weak footing, prompting financial markets
to price-in an interest rate cut in August.
Australia's central bank has left rates at a record low 1.50
percent since August 2016, and has this year shifted to a
neutral bias on the direction of the next move in rates.
(Reporting by Colin Packham; Editing by Sam Holmes)
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