Anthony Albanese finally breaks his silence on tax plan – and the three words that could come back to haunt him

Prime Minister Anthony Albanese has given his strongest hint that he could change the planned phase three tax cuts for the wealthy.

Speaking on Kyle and Jackie O’s show on KIIS FM on Tuesday morning, the Prime Minister promised that the government would now focus on supporting low and middle income earners.

The comments fuel expectations that the government will make a U-turn and now scrap controversial plans to cut the top tax rate for the country’s richest earners.

The phase three tax cut was an inherited policy from the previous coalition government, but the Labor government had always promised to support it.

He told Kyle and Jackie O, “I support tax cuts. Everyone gets a tax cut.

“What we need to do across the board, what we’re looking at, is how we can help low- and middle-income earners.

‘Central Australia in particular is doing very hard. People have mortgages, so we’re looking at ways we can help them.”

Host Kyle Sandilands questioned the Prime Minister on whether he would get a tax cut in this year’s upcoming Budget, adding: ‘I’m in the highest tax bracket there is. The highest.’

The Prime Minister replied: ‘That’s because you’re one of the highest earners, which is a good thing.’

Labor will hold a party meeting in Canberra today to finalize new plans to tackle rising costs of living, but the Prime Minister rejected suggestions it was a crisis meeting.

“It’s not like that – we’re having a normal meeting,” he told the show.

‘We also had a meeting last week. The newspapers like to hyperventilate a bit about these kinds of things.’

Just 18 months ago, the Prime Minister insisted in a TV interview with Seven’s Spotlight that he would not make any changes to the tax cuts: ‘My word is my guarantee… I have always been a man of my word.

‘During the election campaign we said that we would stick to the position that was already laid down in law.

“I believe that if you go to an election and make your promises, you should keep them.”

Radio 2GB’s Chris O’Keefe claimed on Monday afternoon that Mr Albanese will announce the review of his tax plans at the meeting.

Under the new phase three proposal, “all taxpayers will still receive a tax cut,” O’Keefe claimed.

Many lower- and middle-income voters would be better off under the reported change. But Australians earning more than $180,000 will be the biggest losers if their tax cuts are cut.

These claims come despite years of assurances – some as recently as last week – that Mr Albanese’s position on the tax cuts had “not changed” since he vowed to fully enforce them.

A government spokesperson reiterated to Daily Mail Australia on Monday afternoon that its position “has not changed”.

But O’Keefe argued that the government’s “position” was about “cutting taxes” – rather than specifically keeping the stage three cuts intact.

Under the new plans, lower-income people would instead get more relief in an effort to ease cost-of-living pressure on people who feel the pain most directly, O’Keefe said.

Under the old Phase Three proposal first introduced by the Coalition, Australians earning more than $200,000 would receive the most tax relief: $9,075 per year. That amount would be reduced.

The tax cuts in their current form would cost the government more than $300 billion over the next decade. But the Morrison-era policies have not been without controversy.

Left-wing politicians and voters have demanded the government restructure tax cuts to help middle and low-income earners.

Meanwhile, the opposition knows it can benefit from Labour’s breaking election promises if even the slightest change in policy is made.

Deputy Nationals leader Perin Davey confirmed this on Monday afternoon, telling Sky News: “If that is what the Prime Minister is doing, he is breaking an election promise.”

Former Deloitte economist Chris Richardson weighed in on the likelihood of changes on Monday afternoon, saying: “Phase 3… Canberra has suddenly gone very quiet and my spider senses are tingling.”

Last week, Mr Albanese called out an ABC presenter for playing “word games” with him.

“Nothing has changed, nothing has changed,” he said. “We support tax cuts.”

He told an Adelaide radio station last week: “Tax cuts will happen in July. That’s what we’re committed to… we haven’t changed our position.”

But at the same time, a report surfaced from Capital Brief showing that Treasurer Jim Chalmers’ staff had at least “tested the waters” on making changes to the policy.

The publication reported that the Ministry of Finance had rejected a Freedom of Information Act request seeking “modelling, analysis, estimates or correspondence between the Ministry and the (Albanian) Government regarding the impact of the change of phase three on tax revenues or the budget’.

Two separate government documents, prepared between October 2022 and October 2023, were reportedly identified as relevant to the freedom of information quest.

But the request to release them was rejected due to potential ‘damage to the effectiveness of the Treasurer’s decision-making and consultation processes’.

While these documents do not indicate that the government is currently considering changes to tax policy, they do suggest that the government has at some point considered what adjusting tax cuts might look like.

A spokesperson for the Treasurer told Daily Mail Australia it was standard practice for the Minister to be briefed on all aspects of the budget and future changes.

“It is not unusual or controversial for the treasurer to be kept informed of the costs of upcoming changes to the budget,” the spokesperson said.