Anthony Albanese’s position as PM ‘terminal’ after tax backflip

Anthony Albanese refuses to concede he lied on tax cuts as Peter Dutton labels the PM’s position ‘terminal’ and new figures show taxpayers will be slugged an extra $28 billion in bracket creep over the next decade.

Anthony Albanese has refused to say he lied to Australians when he committed to Stage 3 tax cuts shortly before tearing up the promise, as new figures show taxpayers will be slugged with an extra $28 billion in bracket creep over the next decade.

The Prime Minister said he accepted “responsibility” for Labor’s tax changes but would not concede the move amounted to a broken election promise or that he had lied in the lead-up to the announcement.

In a defiant address to the National Press Club on Thursday, Mr Albanese asked Australians to trust him to “make the right call, not the easy call”.

Describing Mr Albanese’s position as “terminal,” the Coalition has called on Labor to go to an early election to get a mandate for its tax changes and questioned how the PM could be trusted on future issues.

But Mr Albanese argued Labor had only formally changed its position after cabinet met on Tuesday, and therefore all previous comments were not misleading.

Prime Minister Anthony Albanese has defended Labor’s tax changes and refused to concede he broke an election promise or lied to voters. Picture: NCA NewsWire

Even as senior Labor figures were in advanced talks over the summer break about redirecting the Stage 3 cuts and Treasury officials were tasked with modelling options, Mr Albanese remained deliberately vague when asked about the government’s plans.

During a radio interview on January 17 Mr Albanese was asked if the tax cuts were still going to happen “as committed to” at the election.

“We’re committed to that,” the PM said, before adding, “well, we haven’t changed our position on that.”

But on Thursday Jim Chalmers revealed Labor was already well into considering changing Stage 3 by this time.

“It became increasingly clear to us over Christmas, over summer, that we could deliver these tax cuts in a better way,” he said.

Mr Albanese said he expected there would be some “controversy” around Labor’s backflip but argued he was putting “people before politics”.

But Opposition Leader Peter Dutton said Mr Albanese should call an election and demanded he apologise to Australians left worse off compared to the original Stage 3 plan.

“The Prime Minister has knowingly and willingly lied to the Australian people,” Mr Dutton said. “He has trashed his reputation for political gain.”

Mr Dutton also questioned if the extra money for lower income earners, about $15 a week in some cases, would “cut it” for struggling families.

Treasurer Jim Chalmers says Labor began talks to change stage three over Christmas. Picture: NCA NewsWire

Opposition Leader Peter Dutton says Anthony Albanese should apologise to voters who missed out on larger tax promises originally promised by Labor. Picture: Richard Dobson

The Coalition has not decided whether it will back the Stage 3 changes, which Mr Albanese vowed would be legislated in time to start from July 1 this year.

Treasury modelling released on Thursday shows Labor’s redesign of Stage 3 will deliver an extra $28 billion in tax receipts to the budget by 2034-35, mostly due to workers moving into higher tax brackets than they would have under the original plan.

Labor’s remake of Stage 3 halves the tax breaks promised to Australians on $200,000 in favour of delivering larger cuts to workers earning below $146,486.

By keeping the 37 per cent tax bracket for earnings between $135,000 and $190,000, more workers will move up a tax bracket sooner than would have happened under the original Stage 3 plan that had a flat 30 per cent rate

Mr Dutton said young aspirational workers would be punished by the bracket creep in the future.

“Over the course of the next few years, it will not be 1.8 million people who are affected adversely by the Prime Minister’s change, it will be four million Australians,” he said.

While the backflip was unanimously endorsed by the Labor caucus, three MPs raised concerns at a meeting on Wednesday about the government’s changes.

Higgins MP Michelle Ananda-Rajah, Macarthur MP Mike Freelander and Reid MP Sally Sitou all asked questions during the meeting about the package about how they should sell the change after Labor had promised so many times not to touch Stage 3.

Ms Ananda-Rajah’s inner Melbourne seat is one of the top 10n electorates with people who earn $180,000 or more, which is the main cohort impacted by Labor’s changes.

No Labor MP has publicly opposed the revamped Stage 3 plan, and many are privately hopeful the shake-up will lift the government out of its midterm slump.

Labor has commissioned a 12-month grocery price inquiry.

Several are confident the extra relief for low and middle income workers will boost Labor’s chances in the upcoming by-election in Dunkley, with 87 per cent of the Melbourne seat due to get more under the changes.

Labor’s own analysis has found 83 per cent of people in NSW, 89 per cent of South Australians, 87 per cent of Queenslanders and 86 per cent of Victorians would get a larger tax cut compared to the original Stage 3 plan.

Mr Albanese also announced on Thursday the nation’s consumer watchdog would conduct a 12-month price inquiry into the supermarket inquiry.

The Prime Minister said the ACCC would look at how online shopping, loyalty programs and changes in technology were impacting competition in the grocery sector, as well as examine the difference between price paid at the farm gate and by customers at the checkout.