Labor says you’d be $7200 worse off under Dutton. It makes several assumptions

Treasurer Jim Chalmers has put a number on his attack against Opposition Leader Peter Dutton’s economic credentials, claiming the average household would have been thousands of dollars worse off under the Coalition.

Fresh Treasury analysis from Chalmers’ office suggests the average dual-income household in Australia would have been $7200 worse off without the government’s cost-of-living measures, which the government says were largely opposed by the Coalition. It says the biggest hit would have been in Queensland, where households would have forgone $8900.

Treasurer Jim Chalmers said Australians would have been facing much more pressure under Peter Dutton.Credit: Alex Ellinghausen

“We’re focused on the cost of living and a tax cut for every taxpayer, while Peter Dutton is focused on tax breaks for bosses’ long lunches and golf days,” Chalmers said.

Dutton this month promised tax deductions of up to $20,000 for meal and entertainment expenses for small businesses, although the Coalition is yet to reveal how much it expects the policy would cost and whether it would make cuts in other areas of the budget to pay for it.

Speaking in the Queensland suburb of Springwood on Saturday, Chalmers said voters would have been doing it tougher under the Coalition.

“We’ve got inflation down, got the budget in better nick, kept the economy ticking over, kept the unemployment rate low, created 1.1 million jobs,” he said. “The alternative to that would have been Australians under much more pressure under Peter Dutton. We know that because what he said about the tax cuts a year ago today.”

The Albanese government last year controversially ditched the election promise from 2022 to remove the 37 per cent tax bracket, instead cutting the bottom rate of tax – for those earning between $18,201 and $45,000 – from 19 per cent to 16 per cent.

While the Coalition ultimately supported the passage of the bill, it initially opposed the tax cuts and left open the possibility of removing the 37 per cent tax bracket. However, in November, Dutton signalled the Coalition may not restore the full stage 3 tax cuts if elected, citing concerns about fuelling inflation.

The Treasury analysis on Saturday suggests the average dual-income household in Victoria would have been $7900 worse off under a Coalition government, and those in NSW would have been $7300 worse off, while households in WA would have forgone $4000.

The analysis assumes wages would have continued to grow at 2.2 per cent a year under Dutton, compared to 4.9 per cent since Labor came to government, and that Stage 3 tax cuts would have been unchanged under the Coalition.

For a dual-income household, the analysis concluded average earnings under the Coalition would have been about $6900 lower, with a further $300 in lost savings attributed to the Albanese’s energy bill relief which was opposed by the Coalition.

The new figures did not include the impact of measures such as cheaper childcare, cheaper medicines and lower HECS debts, instead focusing on the shift in tax cuts and energy subsidies.

A spokesperson for Shadow Treasurer Angus Taylor said Australia remained deep in a cost-of-living crisis, with an Australian with a typical mortgage spending more than $50,000 in additional interest since Labor was elected.

“This is more nonsense from the doctor of spin,” they said. “Core inflation is still well above the Reserve Bank’s target, the economy has come to a grinding halt, productivity is in free fall, GDP per capita has gone backwards for a record seven consecutive quarters and interest rates have risen 12 times since Labor was elected. The Treasurer needs to put less energy into his daily talking points and more into solving the inflation crisis, which any economist will tell you, is far from over.”

Chalmers meanwhile warned Dutton remained the “biggest threat” to household budgets. “Dutton wants to cut $350 billion from the budget and needs to come clean on whether he’s going cut Medicare, housing or pensions,” he said.

On Saturday, Dutton said “interest rates are up 12 times, food, electricity, insurance, all up double digits, and families are really struggling with cost-of-living crisis that Labor’s created through their budget decisions, with no end in sight.

“The Reserve Bank governor has given advice to the government about the amount of debt, the amount of spending that’s taking place and of course that hasn’t been heeded,” he said.

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