Cagey Treasurer Jim Chalmers refuses to confirm cash handout for Aussie workers

A multi-billion-dollar initiative involving cash handouts of up to $300 for every Australian worker is emerging as one of the key cost-of-living measures in next week’s Budget as the Government grapples with stubbornly high inflation.

On Tuesday, the cagey Treasurer refused to be drawn on reports he will soon unveil an “earned income offset” of between $200 and $300 for every person in Australia who gets a wage or salary and pays tax.

The measure would reportedly work in a similar fashion to the existing Low and Medium Income Tax Offset, but would only apply to earned income as opposed to all income, such as that derived from investments.

According to The Australian, which first revealed the Budget option, it is intended to apply only to the coming financial year and would not to be means-tested, but retirees who do not work would not receive it.

Last month the International Monetary Fund issued warnings to governments, including Australia, to avoid spending up big to ease cost-of-living pressures as the US-Iran War pushes the global economy to the brink of recession.

“There’s always a lot of speculation about Budget measures in the weeks leading up to budgets. That speculation is not always right,” Jim Chalmers said when asked about the cash handout measure.

“I don’t intend to add to that specific speculation, except to say that we are already cutting taxes. We cut taxes already. We’re cutting taxes again on in July, we’re cutting taxes again the July after that, we’ve got a tax cut in the form of the standard deduction.”

Shadow treasurer Tim Wilson said if a new “earned income offset” was included in the Budget it would likely “just be consumed by inflation as a consequence of this government’s active inflation agenda”.

“The tax cuts that this Government has offered to date have been consumed by Jim Chalmers’ active inflation agenda, and any earned income offset is likely to experience the same problems,” Mr Wilson said.

Speaking after the Government confirmed on Monday that tax breaks for electric vehicles would also be significantly curtailed in next week’s Budget, Dr Chalmers insisted there would be other significant savings unveiled on Tuesday.

“You’ll see that this is a very responsible Budget, which saves substantial money in order to fund our priorities and deal with some of these pressures and improve the bottom line,” he said.

Those measures are widely expected to include a curbing of negative gearing, an overhaul of the capital gains tax discount, as well as new tax rules imposed on trusts — which all featured in Bill Shorten’s failed 2019 election campaign.

Asked if he supported Mr Shorten’s idea to funnel savings from crackdowns on capital gains tax and negative gearing into income tax cuts, and whether a “one off rebate” would be a sufficient trade-off for imposing wide reforms, Dr Chalmers declined to respond.

“I’ve got a lot of time for Bill, good friend of Bill’s, big supporter of Bill’s — but I’m not going to engage in rerunning three elections ago. My job is to make the right decisions for the right reasons in 2026, not to rerun the election of 2019.”

“I take seriously the views that Bill expresses from time to time. He’s entitled to his opinion. He obviously had a front row seat in that 2019 election — but my job is to look forward, not back.”

Prime Minister Anthony Albanese also refused to be drawn on reports of a Budget tax offset next week, saying Brisbane: “There’s a whole lot of speculation out there in budgets and that’s what happens. Some of it right, some of it’s wrong”.