“We didn’t strike the right chord”: Chalmers on Labor’s class war

Opposition treasury spokesman Jim Chalmers has admitted his party made a mistake on one of the election’s biggest issues, as Labor continues to baulk at tax cuts for high earners.

OPPOSITION treasury spokesman Jim Chalmers admitted he and Labor went too far with attacks on “the top end of town” during the election campaign.

He made the comments as Labor continued to baulk at backing the third and final stage of the government’s proposed tax cuts.

The Coalition has been pressuring Labor to support its three-part tax plan in full, refusing to split the Bill and holding back from negotiating with the crossbench.

Tax cuts coming in two parts this year

Key crossbenchers say tax cuts could be repealed if economy tanks

Opposition treasury spokesman Jim Chalmers says Labor’s attacks on the top end of town “didn’t strike the right chord”. Picture: AAP Image/Dan Peled

Labor’s shadow cabinet meets tomorrow to discuss its response to the tax package, which includes offsets of up to $1080 to come into place from this year.

But it is the final stage of the plan, dropping the 32.5c tax bracket to 30c from 2024 at a cost of $95 billion, which the Opposition has hesitant to back the bill.

Mr Chalmers said that Labor went too far with some of its commentary attacking the “top end of town” during the election.

“We accept that some of the language that we used in the last term, and I used in the last term, didn’t strike the right chord in the Australian community,” he told the ABC.

“If you’re on a good wicket in this country, we say good on you. That is a good thing. We want more people doing well.”

But he said Labor would hold back from supporting the $95 billion third stage of the tax cuts until it had more information about how many people in each tax bracket would benefit.

“What we do know is that you get most bang for buck when you give that tax relief to people who are most likely to spend it in the economy,” he said.

“It’s a huge outlay of money, $95 billion. It’s almost two thirds of the entire tax package.”

Coalition frontbencher Michael Sukkar said it was responsible to stage the tax changes over seven years and not to split it.

“The entire plan hangs together, you can’t cherry pick it,” he told Sky News.

“Labor’s phony class war campaign was rebuffed.”

The Government has already legislated tax offsets of up to $530 this year, raising the 32.5c tax threshold from $90,000 to $120,000 in 2022 and abolishing the 37c tax bracket from 2024 so everyone earning $41,000 to $200,000 pays the same tax.

It’s proposed changes will increase the offset to $1080 this year, lifting the low income bracket from $41,000 to $45,000 and dropping the 32.5c tax bracket to 30c.