Tax cuts linked to the carbon tax will be abandoned in next week’s federal budget, due to a drop in the projected carbon price.
Climate Change Minister Greg Combet confirmed on Wednesday that the Gillard government would ”defer” its plan to increase the tax-free threshold in 2015.
Mr Combet said the shelved tax cut would have been ”in the order” of $1.59 per week for most people earning up to $80,000 a year.
As part of its assistance to households when the carbon tax was introduced, the federal government tripled the tax-free threshold to $18,200 in 2012. This was due to rise to $19,400 in 2015.
Mr Combet told reporters in Sydney that next week’s budget would revise the carbon price forecast - initially put at $29 a tonne for 2015-16 when the local emissions trading scheme is linked to the European Emissions Trading Scheme - down.
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