Received

The treasurer has confirmed the tax offset for low- and middle-income earners will end, in line with the former government's decision to wind down the relief measure.

The low- and middle-income tax offset (LMITO), sometimes called the "lamington'' offset, was introduced in 2018 under the coalition government as part of three-stage reforms to the tax system.

Treasurer Jim Chalmers said the measure, designed to give low- and middle-income earners immediate tax relief, was due to end as specified by former treasurer Josh Frydenberg in the lead-up to his final budget last May.

"At the time, my predecessor Josh Frydenberg said this is not a permanent feature of the tax system," Dr Chalmers told reporters in Brisbane.

Over the weekend, shadow treasurer Angus Taylor said the government was axing the tax hike at a time when Australian families were struggling under the pressure of rising living costs.

He also said the government was trying to bury its decision to cut the offset and was not being up-front with Australians.

Dr Chalmers said Labor made it clear that it could not afford to extend the low- and middle-income tax offset if it won the federal election.

"We made it clear at the time that the LMITO was ending last year, and so it has been completely and predictably dishonest from Angus Taylor, Michael Sukkar and all of these other B-graders to now pretend that this is some kind of new announcement made by the government," he said.

Liberal MP Karen Andrews said the government was spending too much time attaching blame to the coalition for issues facing Australians.

"They have spent every single day personally attacking members of the opposition and doing nothing but saying that all of the woes that Australia is experiencing are because of the coalition," she told Sky News.

"It's actually time for the Labor government to get out there and proactively sell what they're doing."

Despite the disappearance of the tax relief measure, Dr Chalmers said there would still be cost-of-living assistance in the May budget.

He said the $1.5 billion in electricity bill assistance would take the sting out of high energy prices.

Dr Chalmers said the budget would also focus on building resilience against international shocks as the global economy faced its slowest growth rate in three decades.

The treasurer is due to head to Washington for key talks with world counterparts, with global financial uncertainty set to dominate discussions.

Dr Chalmers will take part in the G20 finance ministers' talks in the US, as well as IMF and World Bank meetings and central bank governors' meetings during the three-day trip.

He will hand down his second budget on May 9.

© AAP 2023

The conditions for running a business remain healthy after the Reserve Bank of Australia's decision to pause interest rate hikes sent consumer confidence levels soaring.

Business conditions as measured by NAB in its monthly survey eased two points to +16 index points, which is still well above long-run averages.

Trading conditions stayed flat at an elevated +26 index points in March, suggesting businesses are still experiencing strong demand for their goods and services.

Both employment and profitability indicators fell slightly over the month but remained in positive territory.

The monthly health check on the state of the business community also pointed to inflation passing its peak and starting to cool off, with both labour cost growth and purchase cost growth easing over the month.

NAB chief economist Alan Oster said there were encouraging signs of easing upstream cost pressures, particularly for non-labour costs like materials.

This was in line with the bank's view that inflation likely peaked but would remain elevated in early 2023.

"Overall, the survey suggests the economy is still holding up and indicates there has been some easing in inflation, although there is still a long way to go to bring inflation back down to the RBA's target band and growth could be more volatile from there," Mr Oster said on Tuesday.

The survey also revealed a three-point uptick in business sentiment to -1 index point, a more modest improvement compared to the 9.4 per cent surge in consumer confidence for the month of April.

Unlike the NAB index, the separate consumer survey from Westpac and Melbourne Institute captured the post-April cash rate decision period that resulted in the central bank holding the cash rate steady.

The index lifted to 85.8 in April from 78.4 in March.

Westpac chief economist Bill Evans said the decision to keep the cash rate on hold after 10 consecutive hikes drove the strong recovery in the index.

"Confidence is now at its highest level since June 2022 although still 10.4 per cent below April 2022, the month before the RBA board began raising the cash rate," he said.

Despite the rebound, he said the index was still weak and would likely be reflected in lacklustre spending through 2023 and the first half of 2024.

Treasurer Jim Chalmers said the global economy was facing headwinds but he was "confident but not complacent" that Australia could avoid a recession due to its low unemployment, strong wage growth and high commodity prices providing a buffer.

Dr Chalmers, who is due to hand down his second budget in May, said the budget would focus on building resilience against international shocks.

He also confirmed the tax offset for low- and middle-income earners would end, in line with the former government's decision to wind down the relief measure.

The treasurer is due to head to Washington for key talks with world counterparts, with global financial uncertainty set to dominate discussions.

© AAP 2023

The treasurer has defended his decision to push ahead with his predecessor's plan to axe a tax offset that saved low and middle income earners up to $1500 a year.

Jim Chalmers has confirmed the tax offset for low and middle income earners will end in line with the former government's decision to wind down the relief measure.

Dr Chalmers said the low and middle income tax offset (LMITO), designed to give low and middle income earners immediate tax relief, was due to end as specified by the former treasurer in the lead-up to the Morrison government's last budget in May 2022.

"At the time, my predecessor Josh Frydenberg said this is not a permanent feature of the tax system," Dr Chalmers told reporters in Brisbane.

The opposition has accused the government of confirming the changes under the cover of the Easter break.

Opposition Leader Peter Dutton said many Australians would be worse off if the offset was scrapped.

"They said before the election of course, that they would have a $275 reduction in their electricity prices each year and now we find the government only has a plan to slug 10 million Australians to the tune of $1500 a year," Mr Dutton told reporters.

Dr Chalmers said Labor made it clear that it could not afford to extend the low and middle income tax offset if it won the federal election.

"We made it clear at the time that the LMITO was ending last year, and so it has been completely and predictably dishonest from Angus Taylor, Michael Sukkar and all of these other B-graders to now pretend that this is some kind of new announcement made by the government," he said.

H&R Block tax expert Mark Chapman said the LMITO was introduced in 2018 under the Turnbull government as part of three-stage reforms to the tax system.

Mr Chapman told AAP the offset was supposed to expire a few years ago but was extended and boosted throughout the COVID-19 pandemic to help people doing it tough.

The stage two reforms, which were meant to kick in once the LMITO was removed, were also brought in early and lifted tax bracket thresholds for middle-income earners and permanently boosted the existing low income tax offset.

The controversial stage three tax reforms, which will flatten Australia's tax brackets, are due to start in 2024.

Despite the disappearance of the tax relief measure, Dr Chalmers said there would still be cost of living assistance in the May budget. This includes $1.5 billion in electricity bill assistance.

He said the budget would also focus on building resilience against international shocks as the global economy.

The treasurer is due to head to Washington for key talks with world counterparts, with global financial uncertainty set to dominate discussions.

Dr Chalmers will take part in the G20 finance ministers' talks in the US, as well as IMF and World Bank meetings and central bank governors' meetings during the three-day trip.

He will hand down his second budget on May 9.

© AAP 2023