In his budget reply speech on Thursday night, Anthony Albanese omitted any mention of supporting the Coalition’s stage 3 tax cuts, which would cost the government $137 billion in revenue.
Mr Albanese’s shadow treasurer, Jim Chalmers, took to Sky News on Thursday to say his party would take its time to consider the implications the cuts would have on low and middle-income earners before supporting it.
“The government built these tax cuts into the budget more than three years down the track now, they’ve racked up a trillion dollars [in debt],” Dr Chalmers told Sky News. “We have to weigh all of that up.”
The cuts, set to come into effect in 2024, would cost the government $137 billion between 2024 and 2030, by applying a standard 30 per cent income tax rate to those who earn between $45,000 and $200,000 a year.
For those earning more than $200,000, the tax rate would remain at 45 per cent, which is the current going rate for those who earn $180,000 and more.
While Labor has long opposed the cuts, it is currently looking at capping the stage 3 cuts at $180,000 in a bid to save the government $80 billion.
“We do think that middle Australia deserves tax relief,” Dr Chalmers said.
“We said at the time, and we’ve said ever since, that it didn’t make a lot of sense for the government to commit tens of billions of dollars to the highest-income earners some years down the track.
“Our view has been vindicated by the fact that the government, since making that announcement, has racked up that trillion dollars in debt.”
Prime Minister Scott Morrison took aim at the Labor Party on Thursday for dragging its feet on the cuts, saying that the party’s absent support is harming the small business sector.
“We need to keep doing what is working in this country because it is working and that is what the plan is doing, keeping taxes low, keeping taxes low so businesses and workers can keep more of what they earn,” Mr Morrison told reporters on Thursday.
“They can’t give any guarantees because we know how much they like to increase taxes on working Australians and hardworking small businesses.”
Labor last aired opposition to stage 3 cuts in October last year when stage 2 cuts were introduced early and backdated to 1 July 2020.
The stage 2 cuts, which were initially scheduled to take effect from 1 July 2022, saw the top threshold of the 19 per cent income tax bracket increased from $41,000 to $45,000, and the top threshold for the 32.5 per cent tax bracket raised from $90,000 to $120,000.
John Buckley is a journalist at Accountants Daily.
Before joining the team in 2021, John worked at The Sydney Morning Herald. His reporting has featured in a range of outlets including The Washington Post, The Age, and The Saturday Paper.