Axe the tax cuts, not roads and rail, Miles demands of Albo

Tax cuts for wealthy households should be axed instead of Queensland road and rail projects, Acting Premier Steven Miles has sensationally warned.

• Miles: Better ways to curb inflation

Scrapping planned tax cuts for wealthy households would be a more effective way for the federal government to tackle inflation than axing Queensland road and rail projects, acting Premier Steven Miles has sensationally warned.

In a deepening of the first major conflict between the state and federal Labor governments, the Infrastructure Minister said slashing major projects – as the Albanese government’s razor gang appears set to do – was a bad idea both politically and economically.

The stoush escalated on Monday as both Prime Minister Anthony Albanese and Premier Annastacia Palaszczuk were in China for historic trade talks.

Federal Infrastructure Minister Catherine King pleaded with the states to get on board, saying she had a “mess to clean up” and needed their help.

But writing for The Courier-Mail on Tuesday, Mr Miles said the federal government had shifted the goalposts on the review by now claiming cuts were needed to deal with inflation, while productivity-enhancing infrastructure could reduce inflation in the long term.

Acting Premier and Infrastructure Minister Steven Miles

“That makes it incumbent on the Australian Government to justify why funding earmarked for infrastructure should be prioritised for cuts, as opposed to funding allocated to other priorities – tax cuts for wealthy households for example,” he writes. “Put simply, if you cut funding for improvements to vital infrastructure like the Bruce Highway – the most important National Highway – you get limited benefits now and even worse congestion down the track.”

Stage 3 tax cuts come in from July 1 next year, and will set one tax rate for people earning from $45,000 to $200,000, with that rate dropping from 32.5 per cent to 30 per cent.

Mr Miles said cutting Queensland’s infrastructure pipeline would be detrimental for federal Labor in the state – the only jurisdiction where the party went backwards, despite clinching government.

“The Bruce Highway runs us through every single seat that federal Labor needs to win that it didn’t win last time,” Mr Miles said.

Those comments came as it emerged the Sunshine Coast rail extension is almost certain to be axed or pared back – with Ms King saying heavy rail was “very expensive” and accusing the former government of funding “rail projects that can never be built”.

Federal Infrastructure Minister Catherine King

Some upgrades to the Bruce Highway, as well as improvements to the Centenary Highway, Gateway Motorway and regional roads were also expected to be under review, but Labor’s election commitments and Olympic Games venues have been exempt from the razor gang’s review.

Ms King said the former government significantly expanded the infrastructure pipeline without proper costing, and she needed the state and territory governments’ help to pare it back.

“We want to make sure we do everything we possibly can to get inflation down and know that people need to have cost- of-living relief,” she said.

She said 250 projects were focused on by the 90-day review of the infrastructure pipeline, but would not say how many of those would be cut.

Opposition infrastructure spokeswoman Senator Bridget McKenzie said claims cuts were needed to tame inflation were misinformation.

“If you’re looking for what’s causing rate rises and inflationary pressures, it’s not the infrastructure pipeline … This has become the excuse of convenience,” she said.

“When the infrastructure review was set up, that wasn’t its task at all.”