Furious Coalition unleashes on Albanese’s tax ‘lie’

Stage-three tax cuts to be amended

A furious Coalition has unleashed on Prime Minister Anthony Albanese as he prepares to unveil changes to the controversial stage-three tax cuts.

Labor MPs were meeting in Canberra on Wednesday to approve the changes, which Albanese will detail in a speech to the National Press Club on Thursday.

“This afternoon is focused, really concentrating on middle Australia and that’s the advice that we’ve received from Treasury,” Albanese said on Wednesday morning.

Under the tweaked plan, people earning up to $150,000 are expected to receive bigger tax cuts while the returns will be slimmed down for those on higher salaries.

Under the stage-three tax cuts as they are presently legislated, the 37 per cent marginal tax rate will be scrapped for those earning more than $120,000 a year.

That would deliver an extra $9000 a year to those who earn more than $200,000. Instead, according to widespread reports, the government’s changes will halve that cut to $4500.

The 32.5 per cent tax rate will drop to 30 per cent for workers earning between $45,000 and $200,000. But lowest paid workers are presently set to receive little from July 1.

Under Labor’s reported changes, anyone on $45,000 a year – who would have got nothing on July 1 – will get an extra $800. The annual cut for those on $60,000 leaps from $375 to about $1100, while someone on $100,000 a year will get a cut of just over $2000 (up from $1375 under existing legislation).

On Tuesday, Albanese said he supported cuts, and everyone would receive one. The government has consistently pledged to implement the tax cuts in full.

Quizzed on Wednesday about breaking an election promise to implement the previous government’s full tax package, Albanese said it was his job to make the “right decision”.

“My determination and my job is to get the best outcome for Australians. It’s to respond to the circumstances which we confront. And we know that there’s been considerable coverage about the pressure that is on low- and middle-income earners particularly with regard to cost of living,” he said.

“My job isn’t to say, ‘I’ll just wring my hands about cost-of-living pressure that people are feeling’. My job is to respond, to seek advice, and then to make a difference. To make the right decision, not the easy decision.”

But the Coalition is furious, with Deputy Opposition Leader Sussan Ley accusing Albanese of winning the federal election with a lie.

“I remember him looking straight into the eyes of the Australian people and saying, ‘My word is my bond and I won’t change the stage-three tax cuts’. But … this was the plan all along. The election was won on a lie,” Ley told Sky News.

“Every single Labor MP lied to their community, and they need to stand up and explain that today.”

The opposition’s spokesman for foreign affairs, Simon Birmingham, blasted the plan as a “significant broken promise” and said it did not address bracket creep.

“What Anthony Albanese and Jim Chalmers will be doing is possibly giving some people a little bit more today. But many of those people will be pushed up into those higher tax brackets tomorrow and in the years ahead,” he told ABC radio on Wednesday.

“[The changes are] dressed up as a short-term giveaway, but with long-term consequences of the government relying on even more income tax.”

Australia’s largest business groups have urged Labor “to stick to its promise” of implementing the tax cuts as legislated.

In a joint statement, the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and the Minerals Council of Australia said “tinkering at the edges would mean a promise has been broken”.

“Our tax base is eroding and with an unhealthy reliance on taxing incomes as well as a raft of inefficient taxes, especially at state and territory level, we are increasingly ill-equipped to meet our society’s needs,” the statement read.

“Fixing this mess requires not only political will and co-operation from across the federation – it will require public confidence that a program of reforms will be delivered as promised.”

Australia Institute economist Richard Denniss said a promise had been broken but it was “a very good idea”.

“That was the policy designed by Scott Morrison seven years ago, before COVID, before the cost-of-living crisis, before real wages fell for consecutive years,” Denniss told ABC radio.

Elsewhere, public policy expert Emma Dawson, the executive director of think tank Per Capita, said the changes were necessary and fair.

“Removing a key tax bracket, the 37 cent rate, and reducing the 32 cent bracket to 30 cents, is effectively destroying the concept of progressive income taxation,” she told

“There are arguments to be made – certainly valid arguments – about how those thresholds should change over time, whether they’re indexed to wages or inflation – and there’s definitely an issue with bracket creep at the top.

“But rewarding the very highest income-earners without doing anything permanent for those in low and middle incomes … makes our tax system much less fair.”

Rich Insight economist Chris Richardson warned the reported tax cuts would still be inflationary.

“If the latest round of speculation is right … the size of the tax cuts will be the same, in dollars, the timing is going to be the same so still contains the same inflation risks,” he told Sky News on Wednesday.

He also said the changes would do little to assist the most vulnerable Australians.

“About 40 per cent of Australians don’t earn that much; they are pensioners, they are the unemployed, they are some retirees, they are students, they are disabled, the carers, the sick,” he said.

Greens senator Nick McKim said the reported changes likely would not go far enough.

“[It’s not] the panacea that it’s made out to be for low and middle-income Australians, who will continue to struggle and I very much doubt that whatever tweaks Mr Albanese makes are going to make very much difference to them,” he told ABC news on Wednesday.

Labor needs the support of the Greens and several crossbenchers to get its revised tax package through parliament.

-with AAP

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