New research from The Australia Institute has shown that a majority of Australians plan to save the tax cuts announced in the Budget, bringing into question their ability to stimulate economic activity.
The Australia Institute poll of 1005 Australians between 8 and 9 October 2020 also showed a majority of Australians think the Budget will be good for the economy and almost half of Australians think they’ll be better off personally as a result of the measures it contained.
- Half of Australians (52%) intend to save about three quarters or more of the tax cut, including 39% who intend to save all of the tax cut.
- 77% of Australians intend to save half or more of the tax cut.
- The share of Australians who think that the Budget will be good for the Australian economy increased from 44% in 2019 to 58% in 2020.
- Almost half of Australians (47%) think that they personally will be better off as a result of the Budget, an increase on 34% from the previous year.
- Income support for people looking for work is the most popular Budget priority (chosen by 31%), followed by infrastructure and government services (26%).
- Only 20% of Australians choose bringing forward income tax cuts as the priority, followed by 12% who choose decreasing the deficit.
“While a big-spending budget has been well received, voters still want the Government to prioritise direct support for the unemployed over tax cuts,” said Ben Oquist, Executive Director of the Australia Institute.
“The results also highlight the second-rate economics of tax cuts — with a huge proportion of the tax cuts likely to be saved rather than spent.
“Numerous leading Australian economists and academics warned the Government that tax cuts make for very poor stimulus in a recession, because of people’s tendency to save in uncertain times.
“While the proportion of people who are happy with the Budget has increased from last year, the strong preference for saving the tax cuts will undermine their stimulatory effect.”