New ad urges rethink on budget tax cuts

A new ad campaign will urge Treasurer Josh Frydenberg not to go ahead and bring forward legislated tax cuts, saying they will not boost the economy.

The government has flagged it is considering bringing forward personal income tax cuts that are are scheduled for 2022 and 2024 in the October 6 budget.

But the ad campaign initiated by the Australia Institute think tank and backed by 40 prominent Australians - including two former Reserve Bank officials, a former Liberal Party leader and the head of the welfare advocate, ACOSS - says they will not provide the stimulus the government is looking for.

The institute's research released in recent weeks shows the tax cuts will benefit higher earners more, who are more likely to save rather than spend the extra cash. It also found they will benefit men more than woman, widening inequality.

"We'll need substantial stimulus for an extended period," former Reserve Bank deputy governor Stephen Grenville says.

"Cutting top-rate income tax would be a weak stimulus which undermines the equitable and progressive tax structure we'll need when the COVID crisis is over."

Former Liberal leader John Hewson said the coalition naively hoped tax cuts were good politics.

"But they won't be as they increase inequality and fail to ensure job security and increasing wages with our economy still struggling to exit recession," Dr Hewson says.

The institute's executive director Ben Oquist believes tax is an investment in Australia's society.

"Those calling for tax cuts today will be calling for service cuts in the future," he said.

The campaign will air from Monday on Sky News and commercial television.