Promise check: Deliver a one-off $420 increase in the low-and-middle income tax offset in 2022

At the 2022 election, Labor promised to deliver a one-off $420 increase in the low-and-middle income tax offset in 2022. Here's how that promise is tracking.

Hand pulling out one hundred dollar note

(Image by ABC News: Claire Moodie)

Before the 2022 election, Labor promised to deliver a one-off $420 increase to the low-and-middle income tax offset (LMITO) in 2022, a plan initially announced by the previous government.

As per the budget handed down in March 2022 by the Morrison Coalition government, the $420 boost to the LMITO (for tax returns relating to the 2021-22 financial year) would result in the maximum benefit amount increasing to $1,500 for individuals and $3,000 for couples.

"LMITO is targeted at low- and middle-income earners that are most susceptible to cost of living pressures," Budget Paper No. 2 stated.

"The Government is responding in a temporary, targeted and responsible way to reduce cost of living pressures experienced by Australian households."

Speaking to 2GB radio program Money News the night the March budget was handed down, then shadow treasurer Jim Chalmers confirmed Labor would support the increase to the LMITO.

Asked by host Brooke Corte if he could guarantee that Labor would "tick off" on the $420 increase, Mr Chalmers responded:

"Yes, Brooke. We will be supporting the cost of living relief in the budget."

A policy document on Labor's website confirms this support.

"We will also support cost of living relief for Australians through an increase in the low-and-middle income tax offset by $420 this year," the document reads.

A Coalition bill legislating the $420 LMITO increase — the Treasury Laws Amendment (Cost of Living Support and Other Measures) Bill 2022 — was passed by both houses of parliament on March 30, 2022.

Assessing the promise

This promise will be considered delivered if Labor maintains the legislated $420 increase to the LMITO for 2021-22 financial year tax returns.

Here's how the promise is tracking:

19 May 2023

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Promise check: Deliver a one-off $420 increase in the low-and-middle income tax offset in 2022