‘Call an election’: Dutton’s ultimatum to Albo

Peter Dutton says the Prime Minister has a ‘credibility gap’. Picture: Richard Dobson

Peter Dutton has accused Anthony Albanese of lying to Australians as he challenged him to call an election over the decision to rework the Stage 3 tax cuts.

The Opposition Leader ratcheted up his criticism of the Prime Minister but stopped short of confirming whether he would repeal the tax cuts if the coalition won the next election.

“We will make our policies in due course,” Mr Dutton said.

After 18 months of promising not to change the Stage 3 tax cuts, the Prime Minister confirmed on Thursday that Labor would rework the policy.

It will now favour those earning under $150,000, while higher income earners will have their promised tax cuts slashed.

Mr Albanese defended his broken election promise on Stage 3 tax cuts as he sought to hit the reset button on the government’s cost-of-living agenda at the National Press Club on Thursday.

Question Time
Peter Dutton lashed Mr Albanese for ‘lying to the Australian public’. Picture: Martin Ollman/NCA NewsWire.

The Prime Minister argued his hand was forced by the changed economic circumstances as he sought to win back Middle Australia.

But Mr Dutton said voters shouldn’t believe a word of what Mr Albanese had to say, insisting the reworked tax cuts had more to do with the upcoming Dunkley by-election than handing relief to Aussies doing it tough.

“I think (Mr Albanese) should call an election and put the changed position to the Australian people and let them be a judge of his character, whether he is fit to be prime minister of this country,” the Liberal leader said.

“And I say to the people of Dunkley and the broader Australian people, if this Prime Minister can look your neighbour in the eye and lie to them, you are next.

“The prime minister has a huge credibility problem, he has trashed his reputation for political gain.”

Prime Minister Anthony Albanese formally announced the changes at the National Press Club on Thursday. Picture: NCA NewsWire / Martin Ollman

Under the changes unveiled on Thursday, the lowest tax bracket will be reduced from 19 per cent to 16 per cent for earnings under $45,000 and 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.

About one million taxpayers who earn more than $150,000 a year will be up to $4546 worse off than they would have been under the changes.

However, the vast majority of taxpayers – about 13 million people, earning between $45,000 and $135,000 – will receive an extra $840 under Labor’s new policy.

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

Mr Dutton said he did not think the some four million Australians he claimed would be affected by the change were able to forget or forgive the shake up.

“Those aspirational young Australians, people working hard now for their retirement to provide support to their kids, their families, who will be hit hardest by the Albanese government,” he said.

“I think at the moment the Prime Minister owes an apology to the Australian public, but has not given it.”

Jim Chalmers said his government wanted to direct more cost relief to Middle Australia. Picture: Martin Ollman/NCA NewsWire.

Earlier, Mr Dutton accused Treasurer Jim Chalmers of making the decision to rework the tax cuts in secret in December, a claim Dr Chalmers denied.

“What we said publicly was that the government hadn’t changed its position. The government changed its position on Tuesday, but it did become increasingly clear to us over the course of Christmas that this was the best way to provide more cost-of-living relief,” he said.

Asked how he could maintain trust after the government repeatedly pressed that its position on the legislated package had not changed, the Treasurer said the ‘contentious’ shift was justified given the current economic climate.

“You build trust by taking the right decisions for the right reasons, in the interest of the people, even when those decisions might be politically contentious or politically difficult,” he said.

“We are putting people before politics. We understand people are under pressure, right up and down the income scale, but even better than just acknowledging the pressure that people are under, we are doing something about it.”

Dr Chalmers pressed that the cuts would not add to inflationary pressures and flagged that he had discussed the policy change with RBA governor Michele Bullock, who ticked off on the changes. He also flagged the release of Treasury advice.

“She has indicated to us that she does not expect what we’re proposing today to alter the Reserve Bank’s forecasts or expectations for inflation,” he told ABC RN.

Anthony Albanese will has defended the changes. Picture: Martin Ollman/NCA NewsWire

Independent MP Zali Steggall said she was “struggling” with Mr Albanese’s decision to reverse his stance.

“This has been designed over the course of at least several weeks if not months. And so there is that real question of integrity if you’re going to straight out lie in interview after interview,” she said.

Deputy Liberal leader Sussan Ley back-pedalled on her previous vow that the Coalition would scrap Labor’s tax changes if they won the next election.

Ms Ley told Sky News on Wednesday that rolling back the modifications was “absolutely” the Coalition’s position, but later shifted her tone.

“The tax plan we support is the tax plan we took to the last election,” Ms Ley said.

“This is an entirely new set of changes. Their proposal is not stage 3 2.0, it’s entirely different. We don’t have the details. We will assess them when they are released. But we do know Labor lied to win the election.”

Labor will need the Greens’ support in the Senate to reform the tax cuts. Picture: Luis Enrique Ascui/NCA NewsWire.

Greens leader Adam Bandt insisted that the new tweaks wouldn’t go far enough to assist struggling Australians.

Speaking on Thursday, Mr Bandt issued a warning to the Prime Minister, declaring the Greens would “keep up the pressure to fight for more for low and middle-income earners”.

Mr Bandt said he planned to increase pressure on the government as the new legislation worked its way through parliament.

“The Prime Minister said no one will be left behind, but under these changes Labor’s only giving an extra $15 extra a week to average wage earners while average rents have gone up by about $100 a week,” he told reporters.