The government has removed the Medicare tax rate, which was originally set to rise, allowing Australian households to save $600 a year.
Treasury Secretary Morrison (Scott Morrison) canceled plans to raise the Medicare tax from 2 percent to 2.5 percent next year after the Senate failed to pass the tax increase bill.
This will cost government 8.2 billion yuan in revenue.
Less than two weeks from the launch of his third federal budget, Morrison said economic growth has strengthened to the point where the government can fully pay for the Australian disability insurance plan to ease the burden on families.
The increase in fiscal revenue was helped by stronger commodity prices and improved business conditions.
"We have to let all Australians share the benefits of economic growth," Morrison said. "naturally, a stronger economy provides a stronger budget. The business environment was also very strong, prompting a surge in non-mining investment, up 12.4 percent in the 12 months to December 2017-the biggest gain in a decade.
The Medicare tax increase was due to take effect from next year. Families with an annual income of $60, 000 would have to pay $600 more, while couples with an annual income of $ one hundred and forty thousand would have to pay about $700 more a year.
But Labour and critics now say Morrison is hypocritical.
Labour`s policy is to raise the Medicare tax on people earning more than 87000 yuan a year, which means that the government can now claim before the federal election that its policies are quite different from those of the Labour Party-one to cut taxes and the other to raise taxes.
"as an economist, you will be more aware of the intrinsic link between taxes and economic growth, and how to create unnecessary tax burdens, weaken incentives and aspirations, and stifle demand." Morrison said in a speech on Thursday.
