By James Glynn
SYDNEY--Australian Prime Minister Anthony Albanese will confirm Thursday significant changes to the government's already-legislated income-tax cuts after members of the ruling Labor Party's parliamentary caucus approved the plan in Canberra.
The so-called Stage 3 income-tax cuts, which are due to come into effect in July, will be retargeted to better benefit low- and middle-wage earners, Treasurer Jim Chalmers confirmed in a television interview.
"The proposal that the prime minister will put forward tomorrow means more help for more people. It means a tax cut for every tax-paying worker and it will be better for middle Australia, better for cost-of-living pressures, better for women and workforce participation, better for nurses and teachers and truckies," Chalmers said.
The decision to change the income-tax cuts is a calculated risk for the government, with opposition parties already claiming that failure to deliver the tax cuts as promised amounts to a broken election pledge.
Business groups have also argued that it robs the country of an important opportunity for far-reaching reform of the tax system.
But the decision will give the government the ability to better assist low-income earners at a time of rising costs and surging mortgage interest rates.
The next federal election is expected in early 2025, with support for the Labor government falling in recent months due to the pain of rising interest rates and an emerging slowdown in the economy.
Australians have felt the sting of the biggest surge in inflation since the 1980s in the past few years, which has brought a sudden and dramatic rise in mortgage interest rates.
Some economists also warn that the income-tax cuts could fuel inflation, keeping interest rates higher for longer.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
01-24-24 0559ET
