The Coalition has declared personal income taxes will be cut if it wins power at next month’s election – even though it has blocked the Albanese government’s own permanent tax reductions.
The Liberal and National parties are offering a one-off $1,200 tax offset even as they vow to block Labor’s $268 a year tax cuts announced in the pre-election March Budget.
Opposition Leader Peter Dutton used his Liberal Party campaign launch speech in south-west Sydney to declare a government led by him would offer a Cost-of-Living tax offset from July 2025.
The policy would be available for those earning up to $144,000 with those earning $48,000 to $104,000 getting the full $1,200 offset when they lodge their tax return for 2025-26.
The Coalition is reviving the low and middle-income tax offset that was available when the Liberal and National parties were last in power in 2022, with this temporary relief ending in 2026-27.
H&R Block’s director of tax communications Mark Chapman said the Coalition’s tax offset would feel like a financial assault once it ended.
‘With the resulting pain of not receiving the offset looking very like a tax increase to many taxpayers,’ he said.
Dual-income families will get back as much as $2,400.
Opposition Leader Peter Dutton used his Liberal Party campaign launch speech to declare a government led by him would offer a $1,200 Cost-of-Living Offset from July 2025
‘Today, I announce a significant tax cut to help Australians who are suffering the most under Labor’s cost-of-living crisis,’ Mr Dutton said on Sunday.
‘Around 85 per cent of all Australian taxpayers will be eligible for – and benefit from – this reduction in tax.’
Shadow treasurer Angus Taylor last week told Mark Bouris that taxes under the Coalition, as a proportion of gross domestic product, would be lower under them than Labor.
This is despite the Coalition vowing to block Labor’s $268 a year personal income tax cuts.
‘We have a tax-to-GDP cap we’ve set – Labor hasn’t – and that says in the future, we’re not going to keep clawing back more money from Australians by allowing inflation to erode their pay packets,’ Mr Taylor told the Yellow Brick Road executive chairman’s podcast.
Mr Taylor argued Labor’s budgeted $268 a year tax cuts – adding up to $5.15 a week or 73 cents a week – were not worth it.
‘Their so-called personal income tax cut – that will be gone within a couple of years,’ he said.
‘Because you just wash it all away. I mean, it’s 70 cents a day in 15 months’ time so this is complete nonsense.
Shadow treasurer Angus Taylor told Yellow Brick Road executive chairman Mark Bouris taxes under the Coalition, as a proportion of gross domestic product, would be lower under them than Labor
‘It will be washed out of the system in no time at all and under Labor’s home-grown inflation, we’ve paying a hell of a lot more personal income tax.’
From 1 July 2026, the 16 per cent tax rate for workers earning $18,201 to $45,000 will be reduced to 15 per cent – leading to annual tax relief of $268.
And from 1 July 2027, the tax rate will be reduced to 14 per cent – bringing relief of $536 over two years.
That means every Australian taxpayer earning above $45,000 will get an extra tax cut of $268 in 2026-27 and $536 from 2027-28.
This will cover those on the minimum, full-time wage of $47,627 and the average, full-time income earner on $102,742.
The latest tax cuts under Labor, combined with the rejigged stage three tax cuts introduced last year, means a worker with a middle income of $72,592 will receive a total tax cut of $1,762 in 2026-27 and $2,030 annually from 2027-28.
Neither side of politics is offering to index tax thresholds for inflation to avoid bracket creep, in which inflation pushes people into higher-taxed pay levels despite no increase in earnings in real terms.
