What the PM said about tax cuts for the rich

calculator showing tax cuts

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.

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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.”

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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.

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“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.

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Written by Brad Lockyer

Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.

4 Comments

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  1. Albanese is caught between a rock and a hard place. In the current economic circumstances these cuts should not go ahead, but Labor promised before the election to keep them.
    It seems Albanese does not want to break that promise so the cuts will stay and the federal budget will fall further into deficit.
    Perhaps that will give rise to moving to reign in other tax breaks that mainly benefit the well off like negative gearing and capital gains tax concessions. Also a bigger crack down on multinational tax avoidance.

    • I think that supporting a plan to have the government renege on a pre-election promise is setting a dangerous precedent which will almost come back to bite. I want to hold them to their promises, like action on the rising cost of living, cheaper power, a qualified nurse in every nursing home, tax cuts for everyone. And please, don’t tell us that they can’t deliver because the budget was in a bigger mess than they thought – that one is so old it has whiskers. The same people now complaining about the late unlamented Scomo’s COVID impact on the huge budget are the same people who wanted the astonishly expensive benefits to continue after they were due to expire.

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