Government says tax cuts help wage restraint

Treasurer Wayne Swan has defended the government's planned $31 billion in tax cuts by saying that they will help to ease the pressure on wage growth. “These tax cuts support after-tax incomes, so there is less pressure for big increases in before-tax income by way of wage and salary increases,” he said. The Finance Minister, Lindsay Tanner, has also supported the cuts by saying that the government would lose moral authority if it did not proceed with them and that the unions would use such a decision to argue for higher wage increases.

Source: The Australian Financial Review

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