Labor opens door to backing $158bn tax package in full

Labor’s caucus has left the door open to ultimately backing Scott Morrison’s $158bn income tax package if its amendments fail.

Labor’s finance spokesman Jim Chalmers has spoken to the media after today’s caucus meeting. Picture: AAP

Labor’s caucus has left the door open to ultimately backing Scott Morrison’s $158 billion income tax package if its amendments fail in the Senate.

Opposition Treasury spokesman Jim Chalmers said the party remained committed to splitting stage three from the bill.

But he declared shadow cabinet would reconvene if its amendments did not receive the support of the Senate and the House of Representatives.

Mr Chalmers said caucus this afternoon backed shadow cabinet’s already announced support for stage one and stage two of the government’s package. Labor is also proposing amendments to split stage three from the bill and bring forward stage of the package.

Caucus is understood to remain divided on how to proceed on the tax plan. Some MPs think the government should wave the tax cuts through if Labor’s amendments fail, others feel that if the bill is not split and the third tranche of cuts stripped out, then the entire package should be blocked.

Dr Chalmers said there would need to be another caucus meeting to decide Labor’s policy if its amendments failed in the Senate this week.

“We’re going to put all of our effort into our amendments. If those amendments are unsuccessful, then we will consider our options at that point,” Dr Chalmers said.

“If the government votes against our amendments tomorrow night, they will be voting against every Australian worker getting a tax cut this term.

“If the government votes against our amendments, they will be saying that tax cuts in five years’ time are more important than tax cuts which could start this week.

“The government should stop holding tax cuts this week hostage to tax cuts which wouldn’t come in until 2024-25.”

Albanese slams ‘arrogant’ PM

Anthony Albanese is digging in against Scott Morrison’s demands that Labor pass all stages of its income tax package, dismissing the PM’s insistence as “arrogance”.

The Opposition Leader said today the government should support Labor’s amendments to immediately pass stages one and two of the package.

But with caucus and the shadow cabinet to meet today, Mr Albanese said Labor was undecided on whether it would wave through the package if the opposition’s amendments failed in the Senate.

“We want the government to have a bit of common sense, they won the election but there is this arrogance about them thinking that they can do whatever they want. Well they can’t,” Mr Albanese told Sky News.

“The economic circumstances have changed even since May 18. We want to win in the Senate. That is what we are about. We are about getting stage one through, stage two we support but we believe it should be brought forward because the economy needs it.

“The idea that you would hold up tax cuts today in return for something that might happen in 2025 is quite frankly an economically irresponsible decision.”

Finance Minister Mathias Cormann said Labor should respect the verdict of the Australian people at the May 18 election.

“The Australian people voted in favour of income tax relief for all working Australians,” Senator Cormann told ABC radio.

“Anthony Albanese and Jim Chalmers ought to demonstrate that they have listened to the Australian people, that they accept the verdict, and they should respect it and vote accordingly.

Senator Cormann denied the package would make the tax system less progressive.

“After our plan has been fully legislated, the top 1 per cent of income earners would actually pay a slightly higher proportion of income tax. The top 20 per cent of income earners will continue to pay about 60 per cent of income tax revenue generated across Australia.

“If we don’t legislate our tax plan, over time people will go backwards.”