Opposition prepares to back Labor's stage three tax cuts

Peter Dutton speaking at a press conference

Opposition Leader Peter Dutton says supporting the stage three tax changes will be discussed in the party room. Source: AAP / Joel Carrett

The federal Opposition is preparing to back Labor's stage three tax changes, which broaden the original policy to include millions of low and middle income earners. But a push by the Greens for a parliamentary inquiry could delay the passage of legislation until closer to the May 14 budget.


Listen to Australian and world news, and follow trending topics with

TRANSCRIPT

The Coalition has been making its pitch to voters ahead of the Dunkley by-election in March.

With the Victorian poll expected to be a critical test of the public mood, Coalition Frontbencher Bridget McKenzie has been out and about promoting the parties big ticket promises.

"The Coalition will commit $900 million to 50-50 fund the upgrade to the Baxter Frankston rail line. This is a project we've remained commuted to through thick and thin. We want to see it delivered. Unlike the Prime Minister who stood and promised if he got the chance to hold the infrastructure portfolio, to hold the treasury benches that he would fund this project."

Amid the incoming election, the Opposition has also been changing its tune towards support for Labor's re-assembled tax cuts.

Opposition Leader Peter Dutton says supporting the stage three tax changes will be discussed in the party room.

"The Liberal Party has always been the Party of lower taxes, and that's going to continue. Obviously the Prime Minister has been desperately worried about the outcome of the Dunkley by-election which is due on the second of March so a lot of it's driven by politics for the PM and I just don't think you can believe anything he says."

That's a stark departure from the early rhetoric when Labor's decision to break that election promise was announced.

With Mr Dutton last week holding a different stance.

"For so many Australians the government's re-writing stage three will hinder aspiration, crush confidence and obliterate opportunity. In retaining tax brackets, which were to be abolished, of course, the government has been quite smart because they'll take an additional $28 billion in tax from Australians over the next decade. Again, something that was omitted from the Prime Minister's speech to the Press Club."

From July 1, the tax cuts for higher income earners will be decreased and redistributed to workers earning under $150,000, with high income earners to receive only half of the proposed tax cut.

An average income earner will receive an $800 tax cut under the new plan.

Deputy Liberal Leader Sussan Ley also initially committed to repeal the changes, but is now open to a discussion with Labor.

"But we haven't seen the legislation; we don't know what the Greens will do in the Parliament, but we do know that you can't trust anything this Prime Minister says. So of course we will see the legislation, of course we will make our decision. We will make our decision when we see the legislation because there's no justification for how this has come about and it doesn't stack up. And when we see what the Prime Minister has said in all of the language he's used it's just not clear why he has done this."

Treasurer Jim Chalmers has been fending off questions from the Opposition about whether other election promises will be broken.

Mr Chalmers says the Coalition needs to make up its mind on this policy.

"We need to hear from Peter Dutton and the LNP. Stop stuffing around stop coming up with all kinds of excuses not to support our cost of living tax cut for middle Australia. Come out and say that you will enthusiastically back these changes because they are overwhelmingly better for the communities and the country that these LNP members are supposed to be representing."

If the major parties strike a deal, it cuts out the Greens and crossbenchers who wanted increased JobSeeker and other health spending in exchange for their support.

Peter Dutton did seek feedback from within his ranks ahead of signalling this position, although not everyone in Opposition agrees.

But a number of Liberals have told SBS they are happy to see the tax cut delivered and the optics of standing in the way would likely be electoral poison.

Meanwhile, Mr Albanese has ruled out a freeze on alcohol tax, which goes up twice a year according to inflation, as another proposed cost of living measure.

But he told 3AW the federal government will consider all budget submissions to relieve cost of living pressures.

“The last time I had schooners, I bought a few, it added up to almost $30 for just three beers, so it is expensive. Obviously in the lead-up to budgets, you have submissions and I’m sure that there’ll be submissions along a whole range of ways."

Share