Senior public servants were working on plans to dump the Stage Three tax cuts even as Anthony Albanese told Aussies he had ‘no plans’ to change them.
The Prime Minister and Treasurer Jim Chalmers repeatedly said there would be no changes to the tax cuts originally legislated by the previous Coalition government – right up until the point that they announced drastic changes in January.
But on Monday, Canberra bureaucrats confirmed at a Senate Inquiry that they were working on plans to dump the Coalition’s version for an updated Labor version before Christmas.
More than 11.5million taxpayers are expected to be better off under Labor’s changes, but an estimated 1.1million people earning more than $150,000 will receive only half the tax cut they would have got if the Coalition was still in power.
Liberal Senator Jane Hume asked the Treasury and Finance officials: ‘How many Australians are going to pay more tax because of this decision?’
Senior public servants were working on the Government’s ‘broken promise’ Stage Three tax cuts in December, even as Anthony Albanese (pictured with his partner Jodie Haydone) said he had ‘no plans’ to make any changes
The officials said they would have to take the question on notice, meaning they would answer it later, most likely in a written reply.
Ms Hume was not happy, demanding to be told: ‘How can you not know how many more people are going to pay more tax over the medium term in which the government is going to rake in an additional $28billion?’
She put it to the public servants that ‘when the Prime Minister said on the 21st of December, “we are not reconsidering our position” you actually were reconsidering.’
But they said they had not been ‘complicit in a lie’ in doing so.
Anna Harmer from the Department of Finance said it wasn’t clear until January that the government was about to make changes to the Stage Three tax cuts.
Despite having broken repeated promises to proceed with the Coalition version of the tax changes, Mr Albanese insisted on Sunday that he was not being deceptive.
‘I’m an honest person. I am upfront,’ he told the ABC’s Insiders program.
‘What I have done here is be very, very clear. And I’ve listened to people who are all saying to me, “Well, what are you doing about cost of living? What are the measures that you can put in place?”‘
Around 85 per cent of taxpayers who earn between $50,000 and $130,000 will get $804 more than what had previously been promised.
Those with most to lose if Labor’s changes get though the Senate with crossbench support are people earning more than $190,000, who will see their tax savings cut in half from $9,075 to $4,529.
Labor’s revisions will mean incomes between $18,200 and $45,000 will be taxed at a lower rate of 16 per cent.
The 30 per cent bracket will be extended to cover incomes between $45,000 and $135,000, and the 37 per cent bracket will remain for incomes between $135,000 and $190,000. Above that, a 45 per cent rate will apply.
The latest Newspoll conducted by The Australian found 62 per cent of voters believe Mr Albanese did the right thing by reworking legislated tax cuts.
But the Prime Minister’s personal approval ratings have not improved following the decision.
Labor’s primary vote by one point, but the two-party-preferred contest between the Labor and the Coalition is unchanged from the previous poll six weeks ago at 52-48 in Labor’s favour.
The head-to-head battle between Mr Albanese and Opposition leader Peter Dutton remains at 56-35 in Mr Albanese’s favour.
More than 11.5million taxpayers are expected to be better off under Labor’s changes. A female tradie is pictured
Parliament will resume on Tuesday, with the Government planning to introduce legislation to replace the Stage Three tax cuts with its new model.
It will not have any problem passing in the lower house, where Labor has a majority, but the Government will need crossbench support to get it passed in the Senate if the Coalition either does not back it or abstains.
The Reserve Bank of Australia will also meet on Tuesday, with interest rates likely to remain on hold.
Around 18 per cent of voters surveyed in the Newspoll believed they would be worse off as a result of Mr Albanese’s broken election promise.
The poll also revealed that female voters (65 per cent) were significantly more likely to support the tax cuts while the 50-64 age group were the most supportive of the change.
The 18-34 age group was least in favour of the amended tax cuts.
La Trobe University politics lecturer Nicholas Barry said Mr Albanese’s broken promise is not likely to lead to an early election.
Around 85 per cent of taxpayers who earn between $50,000 and $130,000 will get $804 more than what had previously been promised. A female carpenter using a power tool is pictured
Liberal Senator Jane Hume (pictured) asked the Treasury and Finance officials ‘How many Australians are going to pay more tax because of this decision?’
‘Although Peter Dutton may be pressuring the government to call an election over the recent tax cuts, as things stand, I don’t see us going to the polls in 2024,’ Dr Barry told Daily Mail Australia.
‘Having been out of office for nine years, it’s unlikely Labor would want to take the risk of such an early election.
‘Governments will generally only do this if they are very confident of an overwhelming victory.’
He added that ‘reducing the tax cut received by top income earners makes sense as a policy, given that it’s funding a larger tax cut for low and middle income earners who need it more’.
