Coalition promises tax cuts in first major economic policy since election

Opposition Leader Sussan Ley has promised tax cuts for low and middle-income earners as the Coalition’s first major economic policy since its election defeat.

• Editor’s view: Leying foundation

Opposition Leader Sussan Ley has pledged to cut taxes for Australians, in the Coalition’s first major economic policy offering since being punished at the polls in May.

The promised tax cut package will focus on low and middle-income earners — though the scale and scope will only become clearer as the final budget position becomes known over the next two-and-a-half years.

The move to set up a fight against Labor on tax comes as the Coalition again faces internal turmoil, with former deputy prime minister Barnaby Joyce weighing up his future in the Nationals amid a breakdown in his relationship with the party and leader David Littleproud.

IT IS ABOUT TIME THE COALITION ACTED LIKE AN ALTERNATIVE GOVERNMENT. READ TODAY’S EDITORIAL AND JOIN THE DISCUSSION

Ms Ley will tell the Centre for Independent Studies on Monday the work of her shadow ministry will be anchored on the two primary goals of lower personal income taxes and budget repair.

“Every instinct in my being tells me that Australians should keep more of what they earn,” she will say.

Ms Ley will also use the speech to rail against Labor’s “restrictive industrial relations changes” as a “handbrake on productivity”, saying multi-employer bargaining laws threatened small businesses with conditions they couldn’t afford.

Evoking the memory of economic prosperity of the Howard years, Ms Ley will point to the average worker paying 22.3 per cent of their income to tax when the former Prime Minister left office in 2007 and how bracket creeps means they will keep paying more.

“Today it is 24.3 per cent, and the Parliamentary Budget Office projects it will climb to 27.7 per cent by 2035–36,” she will say.

“That means families working longer hours will see less in their pay packets, small business owners will be pushed into higher brackets sooner, and ambition itself will be taxed away.”

Ms Ley’s appearance at the CIS in Sydney comes a month after she used a Centre for Economic Development Australia speech to lay out her economic philosophy, calling for welfare payments to be reined in and for guardrails to be put on government spending.

It also comes a week after Treasurer Jim Chalmers sensationally backed down on controversial superannuation reforms.

Those changes mean the government will collect $4.2bn less in revenue over the near-term compared to the original proposal — and comes against the backdrop of the recent budget projecting deficits for at least 10 years.

The Liberal leader will argue, again, the importance of intergenerational fairness, smaller government, and cutting red tape as a way to increase productivity.

She will warn that every delay in reform means “lost opportunities, forgone jobs and wages, and a heavier debt burden for our children”, while refusing to accept that “Australia’s best days are behind us”.