Treasurer Jim Chalmers was asked why the public should trust the government again after the Labor government broke its election promise on stage 3 tax cuts.
ABC 7.30pm presenter Laura Tingle described the backsliding on key election promise as a ‘huge political call’.
“Why should voters trust the government’s promises in the future?” Ms Tingle asked the treasurer.
Mr Chalmers defended the controversial decision, claiming it would allow the Government to provide ‘more help for more people’.
ABC 7.30pm presenter Laura Tingle (pictured) described the backsliding on key election promise as a ‘huge political call’. “Why should voters trust the government’s promises in the future?” she asked the treasurer
“Well, we’ve changed our minds, and we’ve changed our minds because we’ve found a better way to provide more cost-of-living relief to more people in a way that doesn’t contribute to inflation,” the president said. Mr Chalmers. replied.
‘And so the proposal that the Prime Minister will submit tomorrow means more help for more people.
“It means a tax cut for every taxpaying worker. And it will be better for central Australia; better for cost-of-living pressures, better for women and labor force participation, better for nurses, teachers and truck drivers.”
Anthony Albanese promised at least 36 times during the election that he would make no changes to the statutory cuts introduced by the Morrison government.
But on Wednesday afternoon, Labor MPs gave their unanimous support to a decision to halve the benefit for Australians earning more than $180,000, in favor of a boost for lower earners.
Although the official announcement won’t be made until Thursday, when the Prime Minister addresses the press club, it is believed Labor will cut the tax rate for people earning between $19,000 and $45,000 from 19 percent to 16 percent.
That gives those making $45,000 a year an extra $932 a year.
Mr Chalmers defended the controversial decision, claiming it will allow the Government to provide ‘more help for more people’ (pictured with Anthony Albanese)
Part-time and very low-paid workers are expected to earn up to $19,000 annually tax-free, up from $18,200.
That’s worth up to an additional $152 per year for those with an income of $19,000 per year.
A worker with $100,000 in income would have received $1,375 in additional tax time under the original plan. Now they take home almost double that: $2,179.
The marginal tax rate of 32.5 cents is expected to be reduced to 30 cents and the tax bracket for middle-income workers will also increase from $120,000 to $135,000, according to the Cabinet leaks.
Those earning $120,000 per year will now be better off by $2,807 per year, while those earning $135,000 will benefit by a total of $3,857 per year.
Previous cabinet leaks indicated that key parts of the phase three tax cuts that were most beneficial to people with high incomes above $180,000 would be scrapped.
Mr Albanese will justify his decision to help low- and middle-income earners at the expense of wealthier Australians at the National Press Club on Thursday, selling it as a “tax cut for all” that will benefit all taxpayers.
“This is a plan for Central Australia that will deliver benefits to every Australian taxpayer, both up and down the income ladder,” he will say.
As he braces for further pressure over Labour’s decision, Mr Albanese will justify the major overhaul by saying: ‘If economic conditions change, changing your policies is the right thing to do. That’s what we do’.
Last year, Mr Albanese and Treasurer Jim Chalmers tasked senior officials at the Treasury and Treasury to explore options for cost-of-living relief for Australians.
In his speech, Albanese will cite this advice, explaining that the positive economic prospects of almost five years ago “have not materialized.”
“This is the right decision, for the right reasons and we made it the right way,” he will say.
“It’s the best way forward because it’s the best way to help Australians struggling with their cost of living without putting pressure on inflation.”
Deputy Opposition Leader Susan Ley said the coalition, if elected, would reverse all changes made by Anthony Albanese to the third phase of tax cuts, accusing the Labor Party of “winning on a lie”.
“This is absolutely our position,” she told Sky News.
‘And the thing is, it was Labour’s position too. The promise made, the promise broken, the lies told to the Australian people.”
“All this was decided without proper consultation with the Australian people.
7.30am Ms Tingle presented the claim that the election was ‘won on a lie’ to the Treasurer, who then seized on Ms Ley’s claim that the Liberal Party would reverse its promises. .
“And as I understand it, the Deputy Opposition Leader said today that if they are elected, they will reverse these changes,” Mr Chalmers said.
“That means the Liberals and Nationals will go to the election with a policy of raising taxes in central Australia to fund even bigger tax cuts for people on the highest incomes.”