Australian income tax changes will have limited impact

Significance Labor’s changes reduce help for higher earners and instead prioritise workers on low and middle incomes. Parties on the political right have condemned the move, but opinion polls suggest that it has strong popular support, even from conservative voters. Impacts A heavy drain on budget revenues will nullify any economic gains from tax cuts. The needs of an ageing population will increase demands on government spending as worker participation falls. Weak political backing and vested interests will continue to hamper revenue reform efforts.