PM leaves open talks with Greens on tax cuts

Anthony Albanese is under pressure over his plan to rework the stage 3 tax cuts ahead of the Dunkley by-election. Picture: NCA NewsWire / Martin Ollman

Prime Minister Anthony Albanese has signalled he is willing to negotiate with the Greens and the Coalition to get his government’s overhauled stage 3 tax cuts through parliament.

“We’ll wait and see. We’ll wait for them to go through their mechanisms as well. We’ll talk with all of the crossbenchers,” he said.

The new package, unveiled by the Prime Minister on Thursday, would slash the tax cuts for higher income earners and redistribute it to workers earning under $150,000, with high income earners to receive only half of the proposed tax cut.

When asked directly if he was willing to make further changes to the package to get the support of the Greens and the crossbench, he said the government would talk with all sides.

“We will argue for it. We’ll wait and see. We’ll wait for (the coalition) to go through their mechanisms as well. We’ll talk with all of the crossbenchers,” he said on Friday.

Prime Minister Anthony Albanese says The National Australia Day Citizenship and Flag Raising Ceremony in Canberra. Picture: NCA NewsWire / Martin Ollman

Greens leader Adam Bandt said he wanted Labor to go further, suggesting high income earners shouldn’t get a slice of the tax cut at all.

“Our view is that if we’re going to change what was a fundamentally unfair package to start with, then we should make it fair,” he told ABC radio.

“We will be pushing Labor to do better because in the middle of a housing and rental crisis, we think that the government can do better.”

Mr Albanese has also laughed off a demand for an early election as he faces fierce pushback from all sides of politics on his revamped stage 3 tax cuts.

The Coalition has demanded Labor call an early election, describing Mr Albanese’s decision as a “breach of trust” that breaks his election promise to keep stage 3 unchanged,

“It’s a betrayal,” Opposition Leader Peter Dutton said on Friday.

“It is not just some throwaway comment that he made at a press conference … he continued to repeat it.

“I just think most Australians don’t want a prime minister who looks them in the eye, tells them one thing and then does completely the opposite.”

Speaking to reporters at an Australia Day event in Canberra, Mr Albanese said even if he did call an election, it couldn’t be held until August at the earliest.

“So you work it out. The tax cuts will take place on July 1,” he said.

Mr Albanese argued changing economic circumstances forced his hand. Picture: NCA NewsWire / Martin Ollman

“Peter Dutton will always go for politics. This is about people, not politics.”

The changes would reduce the lowest tax bracket from 19 per cent to 16 per cent for earnings under $45,000 and retain the 37 per cent tax rate for those earning between $135,000 and $190,000.

The 45 per cent tax bracket will now kick in for those earning over $190,000, down from the planned $200,000.

Mr Albanese has refused to say he lied when he committed to stage 3 but said he accepted “responsibility” for the change in policy. However, he wouldn’t concede the move amounted to a broken election promise.

Finance Minister Katy Gallagher downplayed the criticism, insisting it wasn’t a decision the government took lightly.

Jim Chalmers
The Treasurer dismissed the criticism about bracket creep. Picture: NCA NewsWire/ Liam Kidston

“We knew going into this that there would be a lot of commentary around changing our position,” she said on Friday.

“But at the end of the day, it was really about what is the best way to reach people and provide cost of living relief.”

The changes would add $28bn over the next 10 years to the government coffers through bracket creep, according to Treasury analysis also released on Thursday.

Mr Dutton claimed it would leave four million Australians worse off over time.

Treasurer Jim Chalmers said the commentary on bracket creep was “clutching at straws”.

“They’re looking for excuses to oppose bigger tax cuts for more people and they’re doing that for political reasons, not economic reasons,” he said.

The government is hoping the package will be able to pass parliament ahead of the Dunkley by-election on March 2, creating a wedge for the Coalition.

Government Services Minister, and former Labor leader, Bill Shorten bet Mr Dutton $10 he would back the reworked cuts rather than be the “party of higher taxes for Middle Australia”.

Bill Shorten and Peter Dutton debated the new tax cuts on the today show.
Peter Dutton and Bill Shorten went head-to-head on the Today show.

But while Mr Dutton indicated he was opposed to the plan, he stopped short of rejecting it outright.

“We’ll have a lot more to say about our tax policy, but we need to understand what it is,” he said.

In return, he offered a bet of his own: that Mr Shorten would use the broken promise to challenge the Prime Minister for the party leadership in the near future.

“I’m defending the Prime Minister. I support this decision. I think he’s made the right call,” Mr Shorten responded.

Should the Coalition resolve to oppose the cuts, Labor would need to strike a deal with the Greens and two members of the crossbench to push the package through the Senate.