Anthony Albanese’s office has issued strict instructions to Labor MPs amid speculation a major election promise will be broken.
Anthony Albanese’s office has issued strict instructions to every Labor MP to tell voters “we haven’t changed our position” amid speculation he is about to fiddle with his promised tax cuts.
Chaos erupted on Tuesday after reports the Prime Minister was preparing to break a huge election promise by trimming planned tax cuts for people earning over $180,000 a year.
However, the catch would be to lift the current tax-free threshold of $18,000 — which would give everyone a tax cut.
In other words, low and middle income earners would be better off, but high income earners would get less.
The Prime Minister’s office subsequently insisted there were no current plans to alter the tax cuts, and suggested the speculation was “wrong” – while refusing to rule out changes.
“The government’s position hasn’t changed,’’ a spokesman said.
The mantra of “we haven’t changed our position” has been parroted by the Prime Minister, Labor frontbenchers and MPs for weeks now even as work continues inside the government on secret cost of living relief options.
The approved “lines” distributed to all Labor MPs, for if they’re asked about the Stage 3 tax cuts, are outlined in talking points obtained by news.com.au.
Cabinet will meet briefly in Canberra on Tuesday at 9am before a meeting of the full ministry in Canberra to thrash out the cost of living options.
All Labor MPs will travel to Canberra on Wednesday to discuss these options.
But one Labor MP noted the “position hasn’t changed” line does not preclude changing the position subsequently, an option some MPs fear could “torch” the Prime Minister’s credibility.
PM could ‘torch credibility’
“It’s one thing to offer more to low and middle income earners as an equity measure,’’ a Labor MP said.
“But Anthony Albanese could torch his credibility if it’s seen as a broken promise.
“And then what happens if Peter Dutton says, ‘We will match it and leave the Stage 3 tax cuts for the wealthy untouched?’ Then we’re f**ked.”
Because the tax cuts are legislated, any changes will need to return to parliament for debate and new legislation.
Liberal frontbencher Angus Taylor warned the Prime Minister faced a huge backlash over any broken promise.
“The important point here is that this Prime Minister’s word means nothing,” he told Sky News host Peta Credlin.
“His promises are absolutely meaningless. And in terms of broken promises, this one’s really egregious.”
Mr Taylor said the Prime Minister and Treasurer Jim Chalmers promised they would not touch the tax cuts “70 times”.
“This is a Prime Minister. He says one thing, he does another. It’s all politics,” Mr Taylor said.
Albanese’s giant gamble
The tax cut options raised by 2GB host Chris O’Keefe included lifting the tax-free threshold, which would give everyone a tax cut, but trimming the tax relief for high income earners over $180,000.
“Okay, I’m gonna kick the show off like this. Stage 3 tax cuts – the Prime Minister Anthony Albanese is about to overhaul them, restructure them, re-legislate them, whichever way you want to spin it,’’ O’Keefe said.
“They are going to change. The Stage 3 tax cuts will not go ahead as planned.
“Now this is the plan that I’m told will go to cabinet tomorrow and then Labor’s caucus on Wednesday.
“Pretty much every single taxpayer in Australia will now get a tax cut. But lower income earners will get more of a tax cut than was first promised and higher income earners will get less than was first offered.
“Now the Albanese government plans to increase the tax-free threshold. So at the moment it’s $18,200. The tax free threshold will increase. I don’t know what it will increase to, I just know it will increase. That means almost every single taxpayer in Australia will pay less tax.
“But the top tax bracket will remain at $180,000. So instead of paying 30 per cent tax between $45,000 to $200,000, which is what Stage 3 had legislated, the top marginal rate will stay at $180,000.”
The PM’s huge hint
Meanwhile the Prime Minister has dropped a huge hint on new cost of living relief before the May budget, pledging that if he can find a way to “put dollars” into low and middle income earners’ pockets, he will.
Mr Albanese has outlined his priorities for relief as he confirmed the budget surplus – based in part on higher income tax revenue – has provided room for relief.
“If we can find ways to put extra dollars in people’s pockets, particularly those lower middle income earners who are doing it tough, then we are prepared to do so,’’ the Prime Minister told Sky News.
“We will take whatever advice is given to us but we’ll always look for ways in which we can provide assistance to people, particularly people who are on low and middle incomes, the ones who are doing it particularly tough.
Last week, Mr Albanese pledged that promised tax cuts “will happen” from July after weeks of speculation, ensuring that those earning over $200,000 score a whopping $9000-a-year tax cut.
“We have no change to our plans. We, of course, have said that tax relief is really important,’’ Mr Albanese said.
“So they’re going to happen?’’ he was asked on Adelaide’s Triple M radio.
“Well, tax cuts will happen in July,’’ he said.