Tax cut changes ‘stimulatory effect’ is ‘going to be a bit of a challenge’

KPMG Chief Economist Dr Brendan Rynne says the stage three tax cuts and the Albanese government’s changes will have a “stimulatory effect” on inflation, which is “going to be a bit of a challenge”. Prime Minister Anthony Albanese has defended his decision to change the much-promised stage three tax cuts, with the new reformers providing larger tax cuts for Australians earning below $146,486. The government claims the tax changes will benefit an estimated 11.5 million people. After facing backlash for the tax cut backflip this week, the prime minister doubled down, backing his decision. “We don’t think the proposed changes themselves that the government put forward are largely more stimulatory than the stage three tax cuts themselves,” Dr Rynee told Sky News Australia. “They’re a little bit more but virtually negligible. “However, the stage three tax cuts themselves are a little bit inflationary. “I think our concern, from a timing perspective, is that we’re really trying to be in a period where we’re bringing inflation down, and this stimulatory effect regardless … is going to be a bit of a challenge.”