Mathias Cormann piles on pressure on Anthony Albanese to pass tax cuts when parliament resumes

Mathias Cormann piles pressure on Anthony Albanese to pass the Coalition’s tax cuts.

Minister for Finance Mathias Cormann.

The government is piling pressure on Anthony Albanese to pass its full tax cut agenda when parliament resumes in July, with Finance Minister Mathias Cormann declaring the Opposition Leader would be holding on to “the politics of envy’’ rejected at the election by not backing the full package.

Opposition Leader Anthony Albanese. Picture: Colin Murty

Senator Cormann told Sky News this morning that Labor would be putting at risk tax cuts for the very workers it was trying to help if it blocked the two elements of the government’s package that provide tax cuts to higher income earners.

Tax cuts providing rebates of up to $530 for low and middle-income earners have already been legislated but the government took a tax cut of $1080 for singles to the last election. Tranches two and three take effect from 2022 and 2024 respectively and will pass income tax cuts on to higher income earners.

.@MathiasCormann: Our plan provides income tax relief over time to all working Australians in a way that is affordable within the budget. I can't understand why @AlboMP would want to be tied down to a losing pre-election argument.

MORE: https://t.co/pTA8GHqAU3 #Firstedition pic.twitter.com/AgMnj11DrV

— Sky News Australia (@SkyNewsAust) June 18, 2019

The biggest sticking point for Labor is the third stage of the government’s plan, which from 2024-25 lowers the tax rate from 32.5 per cent to 30 per cent for Australians earning between $45,000 and $200,000. The third phase costs the budget $95bn in the medium term to 2029-30.

Labor is refusing to back the whole income tax cut package after it asked for modelling on how much of the tax cuts will flow to Australians earning more than $180,000, which the government is refusing to provide.

This morning Senator Cormann rejected Labor’s calls for more detail, arguing the tax cut plan had been fully outlined in the budget.

.@ljayes: If the govt wanted to it could bring back parliament next week, will you do that?@MathiasCormann: No, parliament will resume on the 2nd of July. We want parliament to pass our income tax relief plan in full swiftly in the first week.

MORE: https://t.co/pTA8GHqAU3 pic.twitter.com/VTbGhUsxz8

— Sky News Australia (@SkyNewsAust) June 18, 2019

Senator Cormann’s call for Labor to pass the whole tax package comes amid tensions within Labor whether to wave through the whole package or oppose the tax relief measures for higher income earners.

“My call for Labor to pass the whole tax package is aimed at securing efficient passage of our whole plan for income tax relief in the first week of Parliament in July,” Senator Cormann later told The Australian.

“This is not about politics and stoking division ... this is about persuading Labor to do the right thing by our economy and working Australians.”

Senator Cormann said he would do no special deals with Labor or the crossbench, but confirmed he had talked to Centre Alliance senator Rex Patrick about his plan to reduce gas prices.

.@ljayes: Are you any closer to supporting the Coalition's tax package?@Senator_Patrick: We must be very careful moving forward with this. We need to make sure that we don’t end up with a structural change that later becomes unaffordable.
MORE: https://t.co/pTA8GHqAU3 #Amagenda pic.twitter.com/qsEbMYJDog

— Sky News Australia (@SkyNewsAust) June 18, 2019

Senator Cormann held a “brainstorming session” with Senator Patrick this week on measures to reduce gas prices, as the government attempts to win support from Centre Alliance for its flagship income tax cuts package.

Today, the Centre Alliance crossbencher said he was still having discussions with the government about ensuring the tax measures were not “unaffordable” if the economy worsens.

“The party remains of the view that we have to be very careful moving forward with this. It’s a $158bn decision,” Senator Patrick told Sky News.

“We’d like to see taxpayers get extra money in their pocket … we need to be very sure that we don’t end up with a structural change that later becomes unaffordable. And those are the discussions I’ve been having with the government.”

Senator Cormann also ruled out bringing the next sitting of parliament forward a week to legislate the tax cuts by the end of this financial year., confirming parliament would not return until July 2 — even if the election writs are returned this week.

“The truth is it makes no practical difference. The 18-19 financial year ends on June 30, people will only be able to file their tax returns from July 1,” he said.

“As long as the parliament passes our income tax relief plan in full, swiftly, that first week of July the Tax Office will be in a position to process the tax returns and put more money into people’s pockets and process those tax refunds.”