RBA has not looked at whether redistribution of tax cuts to lower and middle income earners could add to inflation
Neither the Treasury nor Reserve Bank modelled the inflationary effects of the Albanese government’s changes to the stage 3 tax cuts even though both agencies have told treasurer Jim Chalmers that the amendments would not spur price increases.
Treasury conducted other modelling, though, including calculating tax receipts will actually be $28bn higher over the decade to 2034-35 than under the original design.
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