Taylor dodges Press Club debate with Chalmers, pins budget repair on stronger economy

The Coalition will pin its hopes to repair the federal budget on faster economic growth while effectively ruling out wide-ranging tax reform that could drive productivity and remaining coy about the extent of its planned spending cuts.

In an echo of British Labour Prime Minister Keir Starmer’s plan to “go for growth” to repair the UK economy and budget, shadow treasurer Angus Taylor said the starting point for tax reform was “strong economic management”.

Shadow Treasurer Angus Taylor delivers his post-budget reply at the National Press Club in Canberra on Wednesday.Credit: AAP

But Taylor also confirmed the Coalition’s largest announced spending cut, a 41,000-worker reduction in the federal public service, will be achieved through attrition while revealing he would not hold a formal debate against Treasurer Jim Chalmers at the National Press Club.

Last week’s federal budget revealed deficits of $179.5 billion between 2024-25 and 2028-29. Gross government debt, which hit $895 billion under the Morrison government, is expected to break the $1 trillion mark in the coming financial year.

Taylor said the budget had been trashed under Chalmers while Australians had suffered a huge fall in living standards and real wages.

While promising a better budget bottom line over the next four years, Taylor said ultimately that turnaround would have to be driven by a stronger economy.

“The budget deterioration means that the pathway to balancing all three objectives is to strengthen economic growth,” he said.

“We cannot provision for essential services, protect our nation from future shocks, and secure the defence of our nation by robbing one generation for another.

“We’ve been clear that the starting point for real tax reform is strong economic management.”

The Coalition has vowed to repeal the small tax cuts legislated by the government that start in 2026. The cuts will reduce the bottom tax rate to 16 per cent from 14 per cent by mid-2027, saving someone earning more than $45,000 about $10 a week.

Taylor, asked if the Coalition would repeal the 37 per cent tax rate, said that was off the agenda as the budget’s “reservoirs” had to be rebuilt. He said the Coalition’s planned $6 billion cut to fuel excise, slated to run for 12 months, was targeted tax relief that would deliver immediate benefit.

Apart from the cut to the public service, the Coalition has said it has opposed $100 billion in what it has described as “unnecessary spending”. This includes three off-budget funds, the $10 billion Housing Australia Future Fund, the $19 billion Re-Wiring the Nation fund and the $15 billion National Reconstruction Fund.

Taylor would not be drawn on what would happen to the money contained in the funds. The housing fund is held by the Future Fund and last year earned almost $900 million in revenue.

But he reiterated cuts of 41,000 positions to the public service, which Opposition Leader Peter Dutton has said will save $10 billion over four years, would be aimed at Canberra-based, non-frontline officials.

Jim Chalmers and Josh Frydenberg faced off at the National Press Club in 2022. Credit: AFR

Since the Albanese government came to office, it has increased Canberra-based public servants by 7087.

While Dutton and Prime Minister Anthony Albanese will face off in a public debate next week, Taylor said he would not participate in a debate against Chalmers at the National Press Club. Other debates, including on pay television and the ABC’s 730 program, are planned.

It would be the first time since the 1998 election that a treasurer’s press club debate has not taken place. Labor shadow treasurer Gareth Evans failed to debate Peter Costello in that year.

Chalmers, visiting flood-affected parts of western Queensland on Wednesday, accused Taylor of both failing to reveal the spending cuts necessary for the Coalition’s nuclear power policy while talking down the economy.

“After a performance like that, you can see why the Coalition has been hiding Angus Taylor throughout this campaign. You can see why he refuses to debate me at the National Press Club after an effort like that,” he said.

In an effort to repeat its 2022 election campaign ploy of vowing to support higher wages, Labor has made a formal submission to the Fair Work Commission to back an “economically sustainable real-wage” increase to the minimum wage, which is currently $915.80 a week.

Albanese said a pay rise to low-paid workers would help the economy, including small business, as these people would spend much of their extra income.

Dutton, also campaigning in Melbourne, would not be drawn on the size of pay rise for those on the minimum wage he supported, but backed a lift.

“[We’re] without economic advice from Treasury and Finance, our position is we want higher wages and we want to make sure we have downward pressure on costs because under this government, real wages have gone backwards,” he said.

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