Dutton blasts govt’s tax ‘black hole’, but won’t commit on cuts

Dutton grilled over tax-cut plans

Opposition Leader Peter Dutton has accused the government of a “massive black hole” in its revised tax cut plan – while repeatedly refusing to say if the Coalition will back it.

Dutton said Labor’s revamped stage-three cuts would leave four million Australians worse off over time because of bracket creep.

“Every time you get a pay increase at work, over the course of a 10-year period … you go up through the brackets,” he said on Friday.

“It’s a silent killer, bracket creep, because it just means more and more money is being taken out of your pocket. The government has not reformed that.”

Dutton was in the Melbourne seat of Dunkley on Friday, where there will be a byelection next month. More than 80 per cent of Dunkley voters will be better off under Labor’s revised tax plan than the Coalition package as legislated.

Dutton accused Prime Minister Anthony Albanese of dishonesty over the stage-three tax changes. He said 1.8 million workers would face tax increases as a result, rising to 4.1 million in the medium term – although he did not say where the figures were from.

“I don’t think the people of Dunkley are silly, by any stretch of the imagination, and yet the Prime Minister is treating them with contempt,” he said.

“We believe there’s a black hole in what the government is offering. The Prime Minister … in his Press Club speech never mentioned the extra $28 billion in tax that he was going to rip out of the pockets of Australian taxpayers.”

Labor’s revised tax cuts will deliver $28 billion more to government coffers over the next decade than the Coalition’s original plan.

Dutton said the opposition was still considering whether to back the revised tax cuts. The government needs Coalition support, or the backing of the Greens and several crossbenchers, for its amendments to become law.

“We’re working through the figures. There are big numbers here. And our argument is that there should be incentive in the system,” Dutton told Nine’s Today show earlier.

“It’s very clear that the Liberal Party is the party of lower taxes. We always have been. We always will be because we manage the economy more effectively. So we’ll announce our position in due course. But we think there’s a massive black hole in what the government’s doing.”

He also took a swipe at three Labor premiers, who have urged the Reserve Bank to cut official interest rates when it meets next Tuesday.

Dutton said the premiers should instead concentrate on issues in their states, like ambulance ramping and youth crime.

“The independence of the Reserve Bank is important so that there’s not political interference … they should, you know, concentrate on fixing up their own problems,” he said.

It follows Queensland Premier Steven Miles imploring the central bank to cut rates.

“The Reserve Bank needs to start cutting interest rates now to take pressure off households,” he posted on social media on Thursday.

“There’s no rule the banks can’t cut their rates first. Many of them lifted their rates before the RBA.”

Miles’ comments were mirrored on Thursday by Victorian Premier Jacinta Allan and Western Australian counterpart Roger Cook.

Federal Education Minister Jason Clare told Seven’s Sunrise on Friday that most Australians wanted to see interest rates fall.

“It is a matter for RBA, though,” he said.

“To get them to cut interest rates we have to get inflation down – that’s happening.”

Earlier this week, hopes that rates will soon fall were fanned by Australian Bureau of Statistics data showing annual inflation eased to 4.1 per cent in the December quarter, down from 5.4 per cent in the September quarter.

Dutton said the Coalition also wanted rates to fall.

“I want to see them come down as quickly as possible, but the Reserve Bank is going to deal with that,” he said.

Deputy Liberal leader Sussan Ley said the premiers’ “demand” amounted to “economic idiocy” and was “quite crazy”.

The RBA has hiked interest rates since May 2022 to try to cool surging inflation. Economists are broadly betting on no change to the official cash rate on Tuesday. It sits at 4.35 per cent.

“If you can get inflation down, then we’ll see interest rates go down,” Clare said.

“We know there are a lot of Aussies that are doing it tough and would like to see their interest rates go down.”

-with AAP

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