Coalition promises to reinstate bigger tax breaks for high earners

Labor’s rejigged stage 3 tax cuts are set to sail through parliament, after the Coalition and Greens offered only rhetorical opposition in the bill’s final pass through the senate.

Jim Chalmers told the Coalition to stop ‘stuffing around’ and pass the revamped stage 3 tax cuts legislation.

Labor’s rejigged stage three tax cuts are set to sail through parliament days ahead of Saturday’s Dunkley by-election, after the Coalition offered only rhetorical opposition in the Senate and pledged to go to the next election with a promise to reinstate tax breaks for higher income earners.

The Albanese government expects its final legislation will pass on Wednesday, with the Greens also set to grudgingly support the bill even as they bemoaned the fact that the “revised tax cuts will still make economic inequality in Australia worse”.

Jim Chalmers in parliamentary question time called on the opposition to “stop stuffing around in the Senate and pass the tax cuts that Australians need and deserve”.

“Australians are under pressure,” the Treasurer said.

Ahead of a by-election this weekend in the relatively safe Labor seat of Dunkley in outer Melbourne, Dr Chalmers said “we know what those opposite are up to … They think if they blow the dog whistle hard enough, and if they cuddle up to the far right enough, that the good people of Dunkley won’t realise that those opposite have said they will roll back our tax cuts.”

In a proposed amendment to Labor’s legislation, the opposition said “because Australians are hurting from the government’s mismanagement of the economy, the Coalition will not oppose the reduction in the 19c tax rate to 16c”, referring to the lowest tax threshold.

However, it added: The ­Coalition is committed to going to the next election with a tax reform package that is in keeping with the stage three tax cuts”.

The legislated tax cuts would have created a flat 30c tax bracket between $45,000 and $180,000.

Labor’s changes will retain a 37c tax rate on income earning between $135,000 and $190,000.

In conjunction with reducing the lowest rate from 19 per cent to 16 per cent on earnings between $18,200 and $45,000, the government says all 13.6 million tax payers will receive a tax cut, and that more of the benefits will accrue to middle-income workers at the expense of those earning above about $147,000.

The Greens in proposed amendments signalled they would wave through the stage three changes, while also suggesting rhetorical amendments to the legislation that would note “these revised tax cuts will still make economic inequality in Australia worse”.

With the Coalition unwilling to risk the backlash of opposing bigger tax cuts for more workers by blocking the changes, Anthony Albanese is yet to receive a bump in the polls. Newspoll at the weekend showed a one-point fall in support for Labor since the previous survey.