‘Everyone will get a cut’: PM’s tax bombshell

Federal govt mulls more cost-of-living relief

Prime Minister Anthony Albanese has promised “everyone will be getting a tax cut”, as his government mulls cost-of-living relief for struggling Australians.

“I support tax cuts and everyone will be getting a tax cut,” Albanese told FM radio hosts Kyle Sandilands and Jackie Henderson on Tuesday.

“What we’re doing is looking at how we can help low and middle-income earners.

It was Albanese’s clearest hint yet that the government is preparing to make changes ahead of the controversial stage-three tax cuts taking effect in July.

“Middle Australia, particularly, is doing it really tough. We’re looking at ways in which we can provide assistance to them,” Albanese said.

“We did that last year with a range of measures. People are benefiting from cheaper medicines, childcare, the energy price-relief plan, but we’re looking at other ways as well.”

The tax cuts were introduced under the former Coalition government and reaffirmed by Albanese when Labor won the 2022 election.

As currently legislated, the vast swathe of the benefit of the final stage goes to those earning more than $180,000 a year. This is because they introduce a 30 per cent tax rate for anyone earning $45,000-$200,000.

Ahead of an emergency meeting of Labor MPs in Canberra on Wednesday to discuss cost-of-living relief, Albanese refused to guarantee leaving the legislation untouched.

“We’re having a normal meeting. We had a meeting last week as well,” Albanese said.

Sandilands repeatedly asked if Albanese would be “ripping off the high end of town”.

“I support tax cuts. Everyone will be getting a tax cut,” Albanese said.

“Me too?” asked Sandilands, to which Albanese said: “You will always be looked after, Kyle, because I know you’re struggling.”

“People laugh but I am in the highest tax bracket there is – the highest,” Sandilands said.

The government is yet to make any public announcement on its plans for cost-of-living relief. But the Coalition has condemned even the suggestion of changes, with shadow treasurer Angus Taylor labelling it “the mother of all broken promises”.

“This is something that the Prime Minister and Treasurer have committed to over 100 times,” he told Seven’s Sunrise program on Tuesday.

“It’s in the legislation and Labor voted for it and it’s been to two elections – so this is not something you change.”

Deputy Nationals leader Bridget McKenzie also decried the proposition, saying those in the top tax bracket will lose more of their own money.

“It’s absolutely shameful that the government is thinking of re-examining legislated tax cuts,” she told Nine’s Today show.

“Giving Australians more of their own money back in their pockets to pay their mortgage – which has gone through the roof – the energy bills that they’re all struggling with, is absolutely the right thing to do.”

Asked about the policy on Tuesday, Mr Albanese did not confirm nor deny any changes but affirmed that “everybody will be getting a tax cut”.

“What we’re doing is looking at how we can help low and middle-income earners,” he told KISS FM.

“Middle Australia particularly is doing really tough.

“People have a mortgage so we’re looking at ways in which we can provide assistance to them.”

While inflation has peaked, forecasts have shown it will still take more than a year for it to come back to the Reserve Bank’s target band of between 2-3 per cent.

The Greens have ramped up calls for the government to ditch the cuts, warning the measure would increase cost-of-living pressures.

Costings received by the party from the Parliamentary Budget Office showed the tax cuts would cost $300 million more in the next year, and $10 billion extra than forecast in the next decade.

In a letter to Treasurer Jim Chalmers, acting Greens leader Mehreen Faruqi said those earning $50,000-$75,000 would contribute the most to government revenue, once the tax cuts and bracket creep were taken into account.

“The stage-three tax cuts do not help those most struggling with the increased cost of living,” Faruqi said in the letter.

“It will lead to over $70 billion of additional debt with nothing productive to show for it.”

-with AAP

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