Angus Taylor says government axing stage-three tax cuts ‘would be a broken promise of incredible magnitude’
Angus Taylor has said there is “no ambiguity” on the commitment to stage-three income tax cuts, warning Labor that inflation was not an excuse to scrap them.
The shadow treasurer described the tax cuts as the greatest “marker of values in this term of parliament” at the National Press Club on Wednesday, underscoring the political danger if the Albanese government decides to ditch them.
The warning from the opposition came as the prime minister, Anthony Albanese, used a speech on Wednesday to argue the value of government spending across a range of programs amid growing debate about how they will be paid for.
Taylor continued the Coalition’s pattern of criticising Labor’s first budget in nine years for failing to give cost-of-living relief and not putting downward pressure on inflation.
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Taylor attempted to square the two aims, which sit in tension, by arguing increasing gas supply could help tackle inflation “at its source” and budget deficits could be closed through “delivering economic growth”.
Taylor said the stage-three tax cuts, legislated to take effect in July 2024 at a cost of $254bn over 10 years, were an “iron-clad promise at the election for Jim Chalmers and Anthony Albanese”.
“Any move to walk away from them would be a broken promise of incredible magnitude,” he said.
“The stage-three tax cuts mean the vast majority of Australian workers will keep at least 70% of every extra dollar they earn. It sends a signal to Australians to get out there, build businesses, build careers, take risks and have a go.”
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Before the October budget the treasurer, Jim Chalmers, briefly opened the door to a debate about restructuring the tax cuts while the assistant treasurer, Stephen Jones, acknowledged “differences of opinion” within the government on the question. But the government decided not to amend its position and has continued to back the cuts.
On Tuesday Guardian Australia revealed a constituent of the environment minister, Tanya Plibersek, claimed she had expressed her personal opposition to the stage-three income tax cuts to Chalmers at a public event, but he said she had raised no concerns with him.
Asked if the Coalition might change its mind given the Reserve Bank of Australia still expects inflation to be above its target range for the next two years, Taylor replied that “both sides of politics went to the last election with an ironclad promise, no asterisks, no footnotes, to support the stage-three tax cuts.”
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“There was no ambiguity about this,” he said. “Further than that, they are in legislation. So to move away from them now, I think, is just completely unacceptable.”
Speaking at the Melbourne Institute’s economic and social outlook conference on Wednesday night, Albanese rejected suggestions the government should have provided direct cost-of-living handouts, saying it would have been “cheap politics and hugely expensive economics”.
“The untargeted spending would make the problem worse. Instead of helping households, it would only add to the inflationary pressures that are eating away at family budgets and devaluing wages,” he said.
While not commenting on how the government intended to address the structural deficits revealed in the budget, Albanese made the case for government spending across a range of programs, including aged care, health care, the NDIS and defence.
“These programs are essential to the safety of our people, fundamental to the health and strength and fairness of our society,” the prime minister said.
“Of course, we always want to see value for every dollar, and we must ensure these programs are sustainable, for the long term. But we also have a clear understanding of the value of these investments, as well as their cost.”
Albanese said they were “stand out structural spends” that needed to be addressed and contrasted the programs to the soaring cost of government debt, which is set to grow 14% annually over the forward estimates.
Taylor earlier said inflation would move back within the target in “the next couple of years” and the economy would then need incentives to “invest and build careers”.
“That’s what we need and I think splitting hairs about timing when that’s what we need is the wrong debate.”
Taylor recommitted the Coalition to a 23.9% tax to GDP ratio, and criticised Labor for abandoning it in the October budget.
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Asked about achieving budget repair by capturing more revenue from the petroleum resource rent tax, Taylor replied that “our focus is to get the [gas] price down, not to tax more”.
Taylor said the Coalition had supported a voluntary code of conduct on gas prices, but it was “too hard to speculate” about the possibility of a mandatory code, accusing Labor of “flying kites every day”.
Taylor used the same line to deride the proposed referendum on entrenching an Indigenous voice to parliament and government in the constitution – despite the fact he was a minister in the Morrison government, which supported a voice.
Asked for his in-principle position on the voice, Taylor replied: “Again, a lot of kites are being flown, we haven’t seen the detail and we said we will make a more detailed response to this when we see the detail but we haven’t seen the detail.”
“The detail matters – in anything like this – the detail really matters.”
Under the Liberal leader, Peter Dutton, who opposed the voice in the last term of parliament, the opposition has pursued an ambiguous position, not ruling out support or allowing a conscience vote on the voice while one of its senators Jacinta Nampijinpa Price is one of its most outspoken critics.