Labor favours surplus over more tax cuts

Labor leader Bill Shorten and his shadow treasurer Chris Bowen will focus on a budget surplus.
Labor leader Bill Shorten and his shadow treasurer Chris Bowen will focus on a budget surplus.

Labor will promise a bigger budget surplus than the coalition instead of further tax cuts for middle income earners to promote its economic management credentials.

The Sydney Morning Herald and The Age report the opposition had been considering a last-minute tax reform package for workers earning between $90,000 and $120,000.

But instead, Labor has decided to focus on the budget bottom line, which it believes will allow it to "burn" the coalition over the question of budget responsibility

The decision comes as both sides of politics are trying to convince Australians they have better tax cuts on offer before they go to the polls on May 18.

Labor has vowed to match the government's tax cuts for people earning up to $125,000 in its first term if it wins the election, and offer more tax relief to lower-income earners.

The party would not go ahead with the later stages of the coalition's tax cuts, which would be fully rolled out in mid-2025.

Treasurer Josh Frydenberg says Labor's promise to match its tax relief up to $125,000 does not take into account the increased burden the party would put on housing investors and others who would be affected by its plans to end some tax breaks.

He argues lower-income earners would get a better deal than they would under Labor once the coalition's plan is fully rolled out.

Both the treasurer and Prime Minister Scott Morrison have been eager to question the ability of Labor and its leader Bill Shorten to handle Australia's books while on the hustings.

"Labor can't manage money which means they can't run the show," Mr Morrison told reporters in Melbourne earlier this week.

Mr Shorten has also been forced to clarify comments about his parties plans for superannuation taxes.

The leader on Tuesday said Labor would not increase taxes on superannuation if he wins the upcoming election.

But his party soon corrected the record, noting some of the superannuation policies Labor released in late 2016 will influence how people's retirement savings are taxed.

Shadow treasurer Chris Bowen says Mr Shorten is a human being and simply misunderstood the question.

"These things happen,we're all human," he told Seven's Sunrise on Thursday.

Mr Bowen stressed Labor's superannuation policies also include increasing what women on paid parental leave receive and preventing dodgy employers from stealing what people are rightfully owed.

Australian Associated Press