Anthony Albanese hopeful on rates, inflation front

“So that should certainly result in a smaller increase this year than what we’ve experienced.”

He made the comments after the release of the International Monetary Fund’s annual report on Australia’s economy on Thursday, which said for the first time the government may need to weigh the cost of Stage Three tax cuts against their purported benefits to the economy.

It also backed broader tax reform, including limiting the current exemption of the family home from capital gains tax, to help the government meet growing structural cost pressures on the budget.

However, Treasurer Jim Chalmers said while the fund and others had proposed changes to the Stage Three tax cuts, the government had no intention of reconsidering them.

“The constituency calling for these tax cuts to be rewritten or scrapped — those calls have been around for a while. But the government’s approach to the third-tier tax cuts hasn’t changed,” he said.

Chalmers also said changes to the capital gains tax are not on the government’s agenda.

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He said the May budget will continue the government’s approach to repairing the nation’s finances through spending restraint, austerity and tax changes for multinationals.

Shadow Treasurer Angus Taylor said the IMF’s report shows the government can ease inflationary pressures by cutting spending rather than trying to raise taxes.

“You can’t steer yourself out of a spending problem. The coalition will not support tax changes that increase the tax burden on the economy, hurt productivity, hijack people’s retirements or worsen inflation,” he said.

“It is crucial that governments get their tax settings right. It is all the more important that Labor deliver on its promise on tax policy by delivering on Stage Three tax cuts.”

But Green Party Treasury spokesman Nick McKim said it was apparent that support for the third stage tax cuts was drying up.

“If the IMF proposes to reconsider tax cuts, then it’s game over. The government needs to throw away these tax cuts for the top end,” he said.

“The government’s position boils down to not doing the right thing because it promised to do the wrong thing.”

While households are struggling against ongoing inflation, sharp falls in property values ​​are also weighing on confidence and purchase intentions.

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On Thursday, economists at the National Australia Bank said they expect house prices to fall another 11 percent by 2023 after falling 7 percent in 2022.

They dropped prices in Sydney and Melbourne by 8.9 percent and 12.7 percent respectively this year, after falls of 12.1 percent and 8.1 percent last year.

The largest declines in 2023 are expected in Brisbane (down 15.1 percent) and Hobart (down 14.7 percent).

“We still view the declines as orderly, primarily due to lower credit power and affordability constraints rather than an oversupply of housing,” they said.

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