Federal budget 2018: Turnbull urged to fill in the blanks

Malcolm Turnbull is under growing pressure to detail the ‘year-by-year’ cost of his $140bn personal income tax cuts.

Malcolm Turnbull in question time yesterday. Picture: Kym Smith

Malcolm Turnbull is under growing pressure to detail the “year-by-year” cost of his $140 billion personal income tax cuts over the next decade if he wants to secure Labor support.

In question time yesterday, Labor launched an attack on the government after Scott Morrison put his new income tax cuts to the parliament without detailing the costs in 2022-23 and 2024-25 when the major changes are due to take effect.

Bill Shorten and his Treasury spokesman Chris Bowen yesterday embarked on a campaign to highlight that $126.6bn of the total $140bn cost of the personal income tax package is incurred outside the forward estimates period, with only $13.4bn being accounted for in the budget.

This includes the most important stages of the package — stages two and three — which are aimed at eliminating bracket creep for middle Australia by introducing a 32.5 per cent tax rate for those on incomes from $41,000 to $200,000.

Speaking in question time, Mr Bowen argued the government had refused to provide the year-by-year costings over the next 10 years because it considered them to be “unreliable” and challenged Mr Morrison over his plan to legislate the entire package immediately instead of splitting the bills to help provide swifter tax relief for low to middle-income earners under phase one of the package.

Labor has only offered its support for the first of three proposed stages in the government’s personal income tax shake-up.

“The budget papers outline three separate steps of the scheme, and the government this morning introduced legislation to implement all three steps of this scheme. Will the Treasurer immediately release the separate cost of each step of its personal income tax scheme?” Mr Bowen asked.

Labor has signalled it could support measures that begin in July 2018. There are two changes that take effect in July 2018 including a non-refundable tax offset of up to $530 for those on incomes between $48,000 and $90,000.

An increase to the threshold for the 32.5 per cent rate from $87,000 to $90,000 — allowing people to earn more before moving to a higher tax rate of 37 per cent — is also due to take effect in July 2018. “If the Treasurer won’t say what the year-by-year cost of the scheme is and he also says the costing’s unreliable, how can the Treasurer ask the parliament to vote for it?” Mr Bowen asked.

Mr Morrison confirmed the 10- year cost of the income tax package at $140bn, but accused Mr Bowen of being “tricky and shifty”.

“The cost of the measure is $140bn over the next 10 years, which is more than twice the relief that is being provided to companies under our enterprise tax plan ... If the opposition wants to deny Australians lower taxes, then they should just be honest about it,” Mr Morrison said.

He also argued the government had followed the “normal process” in reporting the cost of the tax cuts in the budget papers and accused Labor of hypocrisy for demanding year-by-year figures.

“As I’ve indicated, the full cost over the 10 years is $140bn. He (Mr Bowen) asks about year-on-year costs beyond the forward estimates,” Mr Morrison said.

“Labor’s retiree tax provides no year-by-year estimates beyond the forward estimates. They provide a 10-year estimate, which is not 100 per cent clear.”