Albanese heightens speculation over Stage 3 tax cut changes

Prime Minister Anthony Albanese has vowed tax cuts for all, as the federal government prepares to mull over measures aimed at reducing the cost of living.

As speculation swells over possible changes to controversial stage three tax cuts, Albanese said average-income earners would be the focus of relief measures.

“I support tax cuts and everyone will be getting a tax cut,” he told Sydney radio station KIIS FM on Tuesday.

“What we’re doing is looking at how we can help low and middle-income earners, middle Australia particularly is doing it really tough, people have a mortgage, so we’re looking at ways in which we can provide assistance to them.”

The comments come as reports in the Sydney Morning Herald and The Age say the government is considering scaling back the stage three tax cuts to provide greater financial relief for middle-income workers.

The tax cuts, legislated under the former coalition government, were taken to the past federal election as a commitment by Labor and are due to come into effect from July 1.

Under stage three, a single tax bracket of 30% would be applied to people earning between $45,000 and $200,000 annually.

Federal cabinet meets on Tuesday, ahead of a caucus meeting in Canberra on Wednesday where cost of living measures will be considered by the government.

Deputy Prime Minister Richard Marles said the government’s position on the stage three tax cuts had not changed but it was committed to ease financial strains on households.

“We understand the importance of tax cuts, we’ve said this all along, but let me be clear, we are completely focused on easing the cost of living pressures on middle Australia,” he told reporters in Canberra.

“The inflationary environment around the world has persisted and that is putting pressure on middle Australia.”

But shadow treasurer Angus Taylor said any alterations to stage three cuts would represent a broken election promise.

“This is something the prime minister and treasurer have committed to over 100 times,” he told Seven’s Sunrise program.

“It’s in the legislation and Labor voted for it and it’s been to two elections — so this is not something you change.”

Deputy Nationals Leader Bridget McKenzie also decried the proposition, saying those in the top tax bracket will lose more of their own money.

“It’s absolutely shameful that the government is thinking of re-examining legislated tax cuts,” she told Nine’s Today Show.

“Giving Australians more of their own money back in their pockets to pay their mortgage — which has gone through the roof — the energy bills that they’re all struggling with, is absolutely the right thing to do.”

The Greens have also ramped up calls for the government to ditch the cuts, warning the measure would increase cost of living pressures.

Costings received by the party from the Parliamentary Budget Office showed the tax cuts would cost $300 million more in the next year, and $10 billion extra than forecast in the next decade.

In a letter to Treasurer Jim Chalmers, acting Greens leader Mehreen Faruqi said those earning between $50,000 and $75,000 would be contributing the most to government revenue, once the tax cuts and bracket creep were taken into account.

“The stage three tax cuts do not help those most struggling with the increased cost of living,” Senator Faruqi said in the letter.

“It will lead to over $70 billion of additional debt with nothing productive to show for it.”

This article was first published by AAP.