Prime Minister Anthony Albanese has again confirmed his government will not reconsider the decision to push ahead with the controversial stage three tax cuts.
The tax cuts are set to deliver an enormous windfall to Australia’s wealthiest, and are expected to cost the government more than $180 billion by 2031–32.
Initially introduced to parliament in 2019 by the Morrison government, the tax cuts have attracted criticism from inside and outside the Labor party room.
The proposed changes would result in a new tax rate of 30 cents in the dollar for everything earned between $40,000 and $200,000. The move would abolish an entire rung of Australia’s progressive tax system.
Mr Albanese told the National Press Club his government’s hands were tied when it came to passing the cuts.
“Parliament made a decision and we made a decision that we would stand by that legislation rather than relitigate it,” he said.
“We inherited it, and I said that we haven’t changed our position because we were in a situation of all or nothing at the time.
“We voted for tax cuts because to vote against the package would have been voting against tax cuts including for people who desperately needed it at the time.”
Read: How does the LMITO work?
But a lot has changed in Australia since 2019. For starters, the pandemic virtually shut down the economy for two years, and now inflation is rising faster than it has in decades.
The wisdom of pushing ahead with the cuts, which will overwhelmingly favour wealthier Australians, when cost-of-living pressures are so high, has been called into question.
There is growing opposition from charities, advocacy groups and all corners of the political spectrum – including from some Liberal party MPs.
Russell Broadbent, Liberal MP for the Victorian seat of Monash, told the ABC that pushing ahead with cuts in the current economic climate did not make sense.
“When things change, we should change. The world has turned on its head since the tax cuts were introduced,” Mr Broadbent said.
“So, people like me don’t need tax cuts.”
Independent senators Jacqui Lambie, Tammy Tyrrell and David Pocock have all backed repealing or at least changing the tax cuts. This would give the government the numbers in both houses if it wished to change the legislation.
Greens leader Adam Bandt told The Guardian Labor’s refusal to even consider changing the legislation was a betrayal of working-class Australians.
“Australia shouldn’t be left reading the tea leaves and just hoping Labor will shift on their stage three tax cuts for the wealthy, because Labor has locked in behind these regressive stage three tax cuts so many times now,” he said.
“Labor’s stage three tax cuts cost a fortune, and the wealthiest 20 per cent get close to 80 per cent of the money.”
Is giving wealthy Australians a big tax break a good idea right now? Are you worried about what it means for government services? Let us know in the comments section below.
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.