The Coalition has slammed the “mother of all broken promises” amid reports Anthony Albanese is planning to tweak promised tax cuts for high-income earners, saying the Prime Minister should address real cost-of-living pressures that are “killing people”.
Chaos erupted on Monday after reports Mr Albanese was preparing to break a huge election promise by trimming planned stage three 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.
The PM’s office has insisted there are no current plans to alter the tax cuts, while refusing to rule out the changes.
Shadow Treasurer Angus Taylor said on Wednesday that the Coalition would “absolutely not” support the reported changes.
“This would be the mother of all broken promises,” he told Seven’s Sunrise.
“This is something that the Prime Minister and Treasurer have committed to over 100 times. It is in legislation and Labor voted for it. 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 … 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.”
Host Nat Barr asked whether the Coalition supported giving more back to people on lower incomes to help with cost-of-living pressures.
But Mr Taylor said the “sorts of numbers that are being talked about today would barely buy a milkshake a week for an average Australian family”.
“That’s not the suffering and pain they’re under right now,” he said.
“It is more than a milkshake a week. We have seen the sharpest reduction in real disposable incomes for Australians in history. They’re being hit by higher mortgages, higher prices and higher taxes at a 27 per cent increase in personal income taxes in Australia.”
Pressed on whether he wanted “more support for the lower end”, Mr Taylor said “what I want is lower inflation”.
“Get back to basics, do the right, sensible things with the economy that were done through the ‘70s and ‘80s to get rid of inflation back then,” he said.
“We know the formula. It is simple, back-to-basics economics and it’s not what Labor is doing. They’re chaotic, they’re divided. It is clear there [are] differences of views. They are calling everybody back — they could have been doing this last year. We have got a distracted Prime Minister.”
Barr agreed “that’s what everybody wants, to get the inflation beast under control”.
“But if you’re sitting there on the lower end and seeing people on over $200,000 getting $9000 back in this you’re thinking, ‘Hang on, I get nothing. I’m earning $40,000, $45,000 a year and getting nothing in this,’” she said.
“Can you see their frustration?”
The Shadow Treasurer insisted tax cuts for high earners would drive the economy.
“The answer is a strong economy,” he said.
“The economy is not like a pie where you divide it up and hand it out however you like and the pie stays the same size. It doesn’t work like that. Aspiration drives our economy and these tax cuts were all about rewarding hardworking, aspirational Australians who don’t just benefit themselves, they invest, take risks, benefit others by building businesses, creating jobs and so on. That’s what we need. That’s how you beat inflation. That’s not what this government is doing. It’s not how it thinks about the economy. And it’s why it’s in chaos. And it’s divided. And it’s frankly, its policies have failed today.”
Barr asked, “So what about rent assistance. That is killing people. Would you give people any kind of assistance?”
Mr Taylor agreed, “You’re dead right, it is killing people, I’m in furious agreement with you.”
But he suggested measures like rent assistance would only deal “with the symptoms”.
“There’s no point dealing with the symptoms when you’ve got to get to the source,” he said.
“There’s no point putting a Band-Aid on a bullet wound, you’ve actually got to get to the root cause of this, which is rampant inflation that’s driven up interest rates and taxes that are out of control. So you’ve got to deal with that. That will bring down rents. Right now, we’ve got an immigration policy, which is completely outstripping … our ability to supply houses. And yet Labor has allowed it to continue to go up.”
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.
— with Samantha Maiden