Voters care more about cutting national debt than taxes

Australian voters would rather reduce the national debt and get the economy back on track before they enjoy anymore personal tax cuts, according to a new poll published in The Australian.

The Newspoll, conducted exclusively for the publication, revealed that 26 per cent of voters would like to reduce the national debt and deficit, compared to 15 per cent who would like to see individual tax rates cut in the upcoming May budget.

Only health spending ranked higher than reducing the debt, with 27 per cent of voters saying the government needs to spend more to bring the Medicare system up to scratch and increase funding across the portfolio.

According to The Australian, net debt will peak at $348 billion this year before beginning to ­decline. The mid-year economic and fiscal outlook in December forecast a $23.6bn deficit for 2017-18, which was $5.8bn lower than originally planned.

The new figures come after Federal Treasurer Scott Morrison warned he was “not Santa Claus” and wouldn’t be delivering “bag of gifts” the next budget, due to be handed down on May 8. The minister said the government was following voters’ lead and tightening their belts to prove they could live within their means.

While Morrison has already announced one of the budget’s biggest commitments will be the new $5 billion rail connection to the Melbourne Airport, Medicare is also set to get a boost off the back of last year’s levy increase.

Last year’s budget increased the Medicare levy from 2 to 2.5 per cent from July 1 next year, much to the displeasure of lower- and middle-income voters. Medicare has been a sore point for the government since the last election when Labor ran a scare campaign arguing the Coalition was attempting to privatise the public health system.

In a bid to win over disillusioned voters, Morrison has already flagged income tax cuts to relieve the “burden on families, on middle incomes who have been doing it tough”.

Speaking earlier this month, the treasurer said he’d already stipulated “as late as last November that we would be focusing, targeting tax relief to middle-income earners because that’s important economically”.

While there has been plenty of talk about tax cuts and debt reduction, welfare payments, including the pension, haven’t featured heavily thus far. Labor caused a stir in March when they announced plans to get rid of the franking credit cash refunds given to people who pay no tax on part of their income, particularly through self-managed super funds.

The Coalition warned thousands of pensioners would be affected by the deal and stripped of their ability to avoid essentially paying tax twice on their earnings.

Treasury analysis of Labour’s plan showed the biggest group of people hit by the change would be those receiving incomes of less than $18,200 a year, most of whom receive the Age Pension.

Labor has since backtracked on the proposal and insisted pensioners would be exempt from the rule if they were elected to government.

Is reducing the national debt important to you? Or would you rather the budget money be spent elsewhere?