Treasurer rubbishes claims he tried to hide end of tax break for millions

More than 10 million Australians will get less back from the tax man this year, but the Treasurer has denied he used Easter as cover for the bad news.

A tax break for millions of Australians will expire this year as planned amid claims Treasurer Jim Chalmers used the Easter long weekend to bury the news.

The low-and-middle-income tax offset handed people earning under $126,000 a year a tax break between $255 and $1080 and came at a super-sized $11bn cost to the budget bottom line.

The so-called “lamington” tax offset was a temporary measure announced in 2018 as part of the first phase of the three-stage tax cuts.

It was extended by the Morrison government during the pandemic, and again in Mr Frydenberg’s pre-election budget last year.

But Labor put it on the chopping block last October when it handed down its first budget and the offset will not be featured in its second.

“At the time, my predecessor Josh Frydenberg said this was not a permanent feature of the tax system,” Dr Chalmers told reporters in Brisbane on Tuesday.

Over the weekend, opposition treasury spokesman Angus Taylor accused the government of using the Easter long weekend as cover for axing the tax break.

Dr Chalmers was accused of burying the news over the Easter long weekend. Picture: NCA NewsWire / Gary Ramage

Dr Chalmers rubbished the claim as “predictably dishonest”.

“Angus Taylor was in the Cabinet that decided that this payment would end last year,” he said.

“This is another humiliating gaffe from Angus Taylor to pretend the story that was written on Saturday doesn‘t reflect a decision taken by the Government in which he sat around the Cabinet table, when Josh Frydenberg indicated that last year’s payment would be the last one.”

Independent economist Chris Richardson told NCA NewsWire “middle Australia” will be feeling the pinch at tax time.

“It’s July, August, and September when most people get their tax refunds and this year’s tax refund will be about $600 less per taxpayer than last year’s,” Mr Richardson said.

“We’re talking some pretty big dollars.”

Low and middle income earners will see less in their tax refund this year.

That means a person earning $50,000 a year will be subject to a 3.4 per cent or $29 a week cut in their after-tax income when the offset ends in the new financial year.

Someone earning an average wage of $90,000 will face a 2.1 per cent cut, and a person on $100,000 will be $1200 worse off with the end of the offset.

Liberal frontbencher Karen Andrews said the government was quick to blame others but needed to do better to “sell” their agenda.

“They have spent every single day personally attacking members of the opposition and doing nothing but saying that all of the woes that Australia is experiencing are because of the Coalition,” she told Sky News.

“It’s actually time for the Labor government to get out there and proactively sell what they’re doing.”