The Opposition has taken aim at Prime Minister Anthony Albanese for his “huge broke promise” on stage three tax cuts amid overhaul rumblings, declaring a last-ditch change would be a “massive betrayal for hardworking Australian families”.
It was revealed on Monday the Prime Minister is reportedly poised to overhaul legislated stage three tax cuts, with a new plan on the scheme set to go to cabinet this week.
However, Sky News Australia Political Editor Andrew Clennell challenged the claims, saying it “doesn’t make political sense to leave anyone worse off” particularly ahead of a by-election.
While the government has stood firm its position has not changed on stage three tax cuts amid weeks of heightened debate, shadow foreign minister Simon Birmingham said it seems Mr Albanese is gearing up for “the mother of broken promises”.
“Well it does seem as if Anthony Albanese is limbering up for the mother of broken promises that Labor having reassured Australians time and time again pre-election and post-election that they would not be changing legislated tax cuts,” he told Sky News host Peter Stefanovic on Tuesday.
“They’re going to break that promise and that will be a massive betrayal for hardworking Australian families if Labor comes out and changes what are already legislated tax cuts.
“Tax cuts that deal with the massive degree of bracket creep that Australians have been facing and tax cuts that are the third stage of a calibrated package that delivered early support to low and middle income earners, progressively addressed bracket creep right across the board.
“They are a fair package, they are a carefully calibrated package, they are a package of tax cuts Labor promised to stick to and it will be a huge broken promise if Anthony Albanese walks away from those promises.”
His comments come as Mr Albanese’s office has reportedly equipped Labor ministers with a response on what to tell voters about the issue.
An exclusive report by news.com.au revealed MPs have been given strict instructions to say “we haven’t changed our position” if asked about the stage three tax cuts, according to talking points obtained by the publication.
The possibility of a reform to three tax cuts was first revealed by 2GB’s Chris O’Keefe on Monday.
Under the plan, the tax-free threshold – currently at $18,200 – will be increased, while the top marginal tax rate will remain at $180,000 rather than $200,000 as promised in the Coalition-era policy.
This means Australians earning between $180,000 and $200,000 will pay 45 cents on the dollar to the taxman as opposed to 30 per cent.
The slated changes will mean those earning more than $180,000 a year will get $6,000 a year back instead of $9,000, according to O’Keefe.
Clennell weighed in on the topic on Tuesday morning, revealing to Sky News host Laura Jayes he had been told the current speculation on the reform is incorrect.
“I can’t get a clear answer on whether there will be changes to stage three tax cuts,” he said on AM Agenda.
“But what I can tell you is that the proposal to lift that top threshold for the top wage earner of $180,000 will be occurring.
“There has been some speculation that wouldn’t move and the lower threshold for lower income earners would be moved.
“I am told that the speculation is wrong that that $180,00 for the top tax rate will not be moving up.”
Speaking about the possibility of reform, Clennell questioned why the government would want to leave any Australians in a “worse off” position in this final stage of tax cuts.
“It might happen, don’t get be wrong. But it doesn’t make political sense to leave anyone worse off in terms of this tax cuts package ahead of a by-election,” he said.
“It does make political sense to have people off and I think that’s what we’re looking at here.”
Last night on Sky News, host Paul Murray criticised the Albanese Government for its handling of the situation and for failing to provide clarity.
“Think about the person who works 69 hours a week, not the average 40 or even more, now again, no one is saying these people are poor,” Mr Murray said.
“But when 11 per cent of the population is paying 55 per cent of the tax, then when they get a small tax cut, they are still going to be paying the extreme bulk of tax in Australia.
“The assumption is anyone over $180,000, well, they vote Liberal, so who cares, or they vote Teal which means they stop the Liberal Party, so who cares?”
Shadow treasurer Angus Taylor said the Coalition would “absolutely not” support the proposed reform.
“This is something that the Prime Minister and Treasurer have committed to over 100 times… it is in legislation and Labor voted for it,” he told Channel 7’s Sunrise earlier on Tuesday.
“It has been to two elections, this is not something you change.
“Frankly, if the Prime Minister decides he wants to change this it tells us that his word means absolutely nothing because there has not been a promise with so much commitment behind it from both sides of politics for a long time, certainly in my time in politics.”
The stage three tax cuts are set come into effect on July 1 unless Labor intervenes.
According to O’Keefe’s reporting, the changes will go cabinet on Tuesday or Wednesday.
Mr Albanese recently reaffirmed the government’s commitment to allow the stage three tax cuts to proceed unchanged on July 1.
The stage three tax cuts – legislated in 2019 – will abolish the 37 per cent tax bracket and reduce the 32.5 per cent marginal tax rate for Australians earning between $45,000 and $200,000 per year to 30 per cent.