Government’s $158 billion tax cuts package under the Centre Alliance microscope

Two SA senators have expressed doubt on Josh Frydenberg’s tax cuts – but the Treasurer has urged the Senate to back the package that the country voted for.

Treasurer Josh Frydenberg’s $158 billion tax cuts package are under threat, with two South Australian senators saying they are concerned about their impact on a softening economy.

Centre Alliance senators Rex Patrick and Stirling Griff have expressed reservations about the Coalition’s long-term tax reforms, amid fears they could leave the Budget without funds for services.

The reforms will provide a one off tax rebate worth $1080 to thousands of low-income South Australians.

But the reforms also will reduce the amount of income tax millions of Australians pay, by reducing the 32.5 per cent tax rate to 30 per cent by 2024-25, which would reduce the effective tax rate for higher-income earners.

The package is worth $20 billion over the forward estimates.

Senator Patrick told The Advertiser he had no problem with the one-off tax refund of $1080 – but the broader reforms needed more due diligence.

Centre Alliance Senators Stirling Griff and Rex Patrick in the Senate chamber at Parliament House in Canberra, Wednesday, June 20, 2018. (AAP Image/Mick Tsikas) NO ARCHIVING

“We don’t want to be in a situation where, with a softening economy, later on down the track we see cuts to education, health, aged care and pensioner services,” he said.

Centre Alliance looks set to hold a key balance of power role in the Parliament’s new Senate, with the Coalition relying on them heavily to pass the legislation.

Mr Frydenberg has urged the Senate to back the entire plan, which he said had been endorsed by Australians at the federal election.

“This is an important set of reforms that will strengthen the economy at a time when we face economic headwinds, both domestically and internationally,” he said. “Our package will deliver immediate relief as well as long-term reform that will ensure low and middle-income earners do not face bracket creep in the future.”

New Labor leader Anthony Albanese has indicated his party will support the one-off tax refund but has remained coy on the broader package.

Centre Alliance is yet to formalise a position but Senator Patrick said he had requested a briefing from Treasury and a meeting with the Governor of the Reserve Bank of Australia.