Labor may agree to Turnbull tax cuts as tactical move

LABOR is considering the option of waving through the Turnbull Government’s entire tax-cuts plan and then rolling back the cuts for the highest earners if it wins the next election.

LABOR was last night considering the option of waving through the Turnbull Government’s entire tax-cuts plan and then rolling back the cuts for the highest earners if it wins the next election.

The government and the Opposition appear headed for a risky game of chicken, with instant tax relief for 10 million low- and middle-income earners planned for July 1.

Senior Labor figures said last night the tax cuts were best dealt with before five by-­elections on July 28, which are critical for both parties.

REGIONAL VICS TO RECEIVE BELOW TAX CUT AVERAGE

LABOR, GREENS VOTE TO AXE ‘TAMPON TAX’

Opposition treasury spokesman Chris Bowen said yesterday Labor had been very clear that it supported the first stage of the cuts.

But it maintained a high ­degree of scepticism about the 2024 tax cuts, he said.

“That is what a responsible, deliberative Opposition does; takes its time to work these ­issues through. Obviously, this issue is coming to a conclusion,” Mr Bowen said.

“I will be making a recommendation to my colleagues about how to handle the personal income tax measures through the parliament.

“When we’ve been through our normal processes, Bill (Labor leader Bill Shorten) and I will have more to say, our position will be crystal clear.”

Shadow Treasurer Chris Bowen says Labor has been very clear that it supported the first stage of the cuts. Picture: AAP/Lukas Coch

Treasurer Scott Morrison and Finance Minister Mathias Cormann have told the Senate the package is all or nothing, ruling out splitting the Bill ­despite guarantees of the first stage passing.

The entire $144 billion package would not come into effect for seven years, giving any future Shorten government the opportunity to overturn the decision to remove the 37 per cent top tax bracket completely.

But another Labor source said last night: “We haven’t blinked in five years — we won’t this time.

“If the government wants to pass these cuts, they’ll have to split the Bill.”

Prime Minister Malcolm Turnbull yesterday responded to criticism from Labor, saying his tax plans rewarded “aspiration, enterprise and people getting ahead”.

He told parliament the cuts would benefit “people working in hospitality, working on low incomes, because they too want to get ahead and earn big money like the members of the Labor Party opposite”.

Senate independent Tim Storer yesterday made a last-ditch plea to the Greens, Labor and to crossbench colleagues to split the Bill to give low-paid workers some hip-pocket relief while blocking expensive tax cuts for high flyers.

[e-mail]