Labor MP Peter Khalil breaks ranks to says Opposition must pass government tax cuts in full

Labor backbencher Peter Khalil is breaking out, saying his party shouldn’t block tax cuts that would help millions of Australians.

Labor backbencher Peter Khalil has broken ranks from his colleagues by declaring the Opposition has no choice but to pass the full Coalition tax cut plan if it refuses to split package.

The party, still reeling from its shock election defeat, will make a decision in July when parliament returns to debate the legislation.

It remains divided between those who think the government has a mandate to pass the tax cuts — including some in shadow cabinet — and those who believe stage three should be blocked on economic grounds.

Mr Khalil, the MP for Wills in Melbourne’s north, said he would prefer the government split the tax package because the third tranche is “out in the never-never” and it had not explained to the Australian people “how they would pay for it”.

Labor Member for Wills Peter Khalil says the Opposition must pass the Coalition tax plan in full.

“But in the scenario that looks increasingly likely, which is that they will not split the tax cut package, my view is Labor should not block tax cuts that will benefit millions of working and middle-class Australians,” Mr Khalil told the Herald Sun.

“If that means we are not given any choice other than to pass the entire package then that is what we should do.”

While Mr Khalil is the first to speak publicly on the issue, others agree with his position within caucus.

Another Labor MP, who declined to go to the record, said Labor would be “crazy” not to back the full package.

“People don’t give a f--- about the budget — they just want to see the money in their pocket,” the MP said.

“Albo (Anthony Albanese) has to be careful — there’s a lot of risk attached to this, a lot of risk.”

Opposition Leader Anthony Albanese says Labor’s policy agenda is not yet settled.

Labor went to the election opposing the additions to stages two and three in its April 2 budget. The addition to stage two would lift from $41,000 to $45,000 the income threshold under which the 19 per cent tax rate applies.

The addition to stage three would lower the 32.5 per cent rate to 30 per cent and apply it to all income between $45,000 and $200,000, worth $95 billion to the Budget bottom line.

Shadow Treasurer Jim Chalmers said yesterday there was “absolutely nothing preventing” the Government from splitting stage one out from the other two stages of the tax cuts.

Finance Minister Mathias Cormann says Labor should respect the government’s election mandate.

Finance Minister Mathias Cormann said Labor would be “arrogantly thumbing their nose” at voters if they failed to support the package.

MORE: TREASURER REJECTS LABOR’S TAX CUT DEMANDS

If Labor opposed the Bill, the government need four of the six crossbench senators to pass the legislation.

The two Centre Alliance senators appear set to back the plan, with Rex Patrick yesterday telling Sky News the third stage can always be repealed if the economy goes south.

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