The Albanese government is standing firm on its commitment to contentious stage 3 tax cuts, despite leaving the measure out of this year’s budget papers.
Both the Prime Minister and Treasurer Jim Chalmers say their position on allowing the tax breaks from July next year has not changed.
The tax overhaul changes the threshold for marginal tax rate for everyone earning between $45,000 and $200,000.
Wealthy Australians earning more than $200,000 will get a yearly tax break of up to $9000 from next year.
While not contained within the budget papers, the government has revealed that over the decade, the final stage of the former Morrison government’s tax overhaul will cost the budget close to $300bn.
The total cost to the budget is five times the $14.6bn cost-of-living package that Dr Chalmers announced in Tuesday night’s budget.
In an interview on RN Breakfast, Mr Albanese was pressed about how palatable it was for hard-done-by Australians to get just a fifth of what the wealthy would get.
He was asked whether he was worried stage 3 tax cuts would be inflationary and whether the government should assess the tax cuts’ inflationary potential.
To all three questions he replied: “We haven’t changed our position.”
Dr Chalmers told the traditional post-budget National Press Club address the tax cuts weren’t in the budget papers because they “weren’t a feature of our budget deliberations”.
“I understand the interest in them, but our position on them hasn’t changed,” he said.
“They were legislated some time ago, they don’t get a specific reference in the budget because they’re a decision already legislated.”
Earlier, the Treasurer defended the tax cuts, saying they would benefit everyone earning more than $45,000 a year.
“We do support giving back bracket creep to people on middle incomes, but it has not been part of our deliberations for this budget,” he told Seven.
Greens leader Adam Bandt said forging ahead with the tax cuts was a “betrayal” of everyday Australians doing it tough.
“A big reason that Labor refused to lift people out of poverty is that they are committed to stage 3 tax cuts for the wealthy while everyday people get next to nothing,” he told ABC News.
“For a government that says it is concerned about debt and sensible spending, they can still find a quarter of a trillion dollars to give tax cuts to Clive Palmer and Gina Rinehart.”
Opposition Leader Peter Dutton said he believed the tax cuts would “come in at the right time” and the government could not “break their promise”.
“The Prime Minister is not going to add this one to the list (of broken promises),” he told ABC News.
“I think they come in at the right time”
‘Not even a loaf of bread’
Dr Chalmers said the budget’s $14.6bn cost of living measures reflected the government’s effort to “support the most vulnerable people”.
The package comprises a $3.5bn investment to help 11.6 million Australians see a doctor and a $1.5bn package to support 5.5 million Australians pay their electricity bill.
Welfare payments will increase as part of the package, including a $40-a-fortnight rise for JobSeeker recipients, a $92.10 fortnightly boost for those older Australians, and an increase in base payments for people on Austudy and Youth Allowance. Sole parents will be $380 a month better off following changes to single parenting payments.
Mr Bandt said the JobSeeker increase, which equates to about $2.80 a day for younger people, was “not enough to buy a loaf of bread”.
“Labor has betrayed renters, job seekers and everyone who is doing it tough,” Mr Bandt told ABC News.
Mr Albanese said $40 a fortnight would “make a difference to people” and take pressure off.
“We’re dealing with a global economic challenge of inflation, so what we did was to provide support to take pressure off people, as well as always being conscious,” he told ABC Radio.
The budget also included a $15-a-week increase to rent assistance, which Mr Bandt said showed the government didn’t understand the severe rental crisis plaguing the country.
“Five and a half million renters get absolutely nothing out of this budget. Those lucky to get rent assistance might get a dollar or two a day,” Mr Bandt said.