Anthony Albanese faces calls to increase support for young people, pensioners as parliament considers stage three tax cuts

The political debate could be drawn out further with crossbenchers demanding more is done for young people and pensioners, the MPs open to a short Senate inquiry.

Crossbenchers such as Jacqui Lambie and David Pocock are set to push for changes to the revamped stage three tax cuts. Picture: NCA NewsWire / Martin Ollman

Anthony Albanese is facing crossbench demands to do more for young people, pensioners and Australians on low incomes to shore up parliamentary support for his stage three tax cuts revamp, while fending off a fierce political attack from the Coalition over his breaking of a key election promise.

As MPs returned to Canberra for the first sitting week of the year, the government released its tax cuts draft legislation, which is increasingly likely to pass parliament, in a bid to force the Coalition and the Greens to finalise their positions on the package.

But the political debate could be drawn out further, with crossbenchers open to a short, sharp Senate inquiry, spanning two to four weeks, in line with the Prime Minister’s Easter deadline to pass Labor’s tax cuts through ­parliament.

As the government prepared to release Treasury data showing the extent of the tax benefit for an average worker on $73,000 under Labor’s stage three plan, Jim Chalmers defended the extra $28bn taxpayers are expected to fork out over 10 years by declaring governments of either political persuasion could make further changes to the income tax system.

Tasmanian independent senator Jacqui Lambie, who controls two upper house seats, was considering how well pensioners and young people were catered for as she looked through Labor’s stage three exposure draft.

Senator Lambie is supportive of the package but it is understood she is open to making improvements to the bill.

Concerns over how much the stage three revamp helped younger generations was also raised by other crossbenchers, including teal MPs Kylea Tink and Allegra Spender, while the Greens are eyeing a higher tax-free threshold or putting dental services into Medicare.

ACT independent senator David Pocock left the door open to calling for a parliamentary ­inquiry into the revamp, but ­confirmed he supported Labor’s proposal. “My community has been clear from day one that they wanted to see the stage three tax cuts redesigned to be fairer and better fit for purpose for the current economic environment. So I welcome these changes,” Senator Pocock said.

“I’ll consult with my parliamentary colleagues about whether a short Senate inquiry is needed once we have had the chance to review the legislation.”

Ms Tink and fellow teal MP Monique Ryan, as well as One Nation leader Pauline ­Hanson, were also open to a ­parliamentary committee to ­consider the stage three legislation before it was passed.

Ms Tink, who will be polling her constituents into the second parliamentary sitting week on Labor’s overhaul, said she would be disappointed if the government cut debate short and rushed the legislation through.

West Australian teal MP Kate Chaney, who will vote in favour of Labor’s stage three overhaul, was worried a parliamentary inquiry would allow the Coalition to continue politicising the changes.

Mr Albanese was forced to ­declare twice on Sunday that he was an “honest person” after being grilled on whether his word was still his bond.

Coalition insiders also accused Mr Albanese of being wishy-washy on negative gearing and family trusts, after he refused to say if he believed the current negative gearing settings were fair, responsible or appropriate.

“We’re supportive of the current (negative gearing) rules. We have not considered changes to them,” the Prime Minister told the ABC’s Insiders. “I’m an honest person. I am upfront … I’ve listened to people who are all saying … ‘Well, what are you doing about cost of living? What are the measures that you can put in place?’”

There’s growing consensus within the Coalition that opposition MPs will doggedly attack Mr Albanese’s broken election promise and integrity over stage three, but ultimately not stand in the way of Labor’s changes passing through parliament.

With shadow cabinet being held on Monday and the joint Coalition partyroom meeting on Tuesday, there are expectations a position will be formed within days, though referring the legislation to a parliamentary committee could allow the Opposition Leader to delay a final decision.

New Treasury data shows an average worker earning $73,000 – a figure that includes part time workers – would be taxed at 23.6 per cent under Labor’s package in 2034-35 compared with 24.3 per cent under the Coalition’s legislated tax cuts, or 25.8 per cent if today’s settings were extended.

While a person on the average full time wage of $90,000 will receive just $15 extra per week from Labor’s tax cuts than they would have from the Morrison-era package, due to start on July 1, the government will this week talk up the total benefit of its plan.

A person earning $73,000 would receive a $29 per week tax cut compared with $13 under the Coalition’s plan, while someone on $140,000 would receive a $72-a-week tax cut, up from $63 under the original stage three tax cuts.

Australians earning $150,000 or more receive a less generous benefit under Labor compared with the Coalition’s package.

“Our tax cuts deliver more relief to more Australians and if the Coalition cared about the cost of living they’d support them,” the Treasurer said. “Don’t believe those who say the only way to return bracket creep is to disproportionately benefit those already on the highest incomes. Ours is a different and better way to return bracket creep.”

Under Labor’s stage three revamp, the 37 per cent tax rate is ­retained and applied to incomes between $135,000 and $190,000, while the marginal tax rate for those earning between $18,200 and $45,000 is reduced from 19 per cent to 16 per cent.

The 30 per cent tax rate, which under the Coalition’s legislated tax cuts would have applied on incomes from $45,000 to $200,000, will be paid on incomes between $45,000 and $135,000.

Amid increasing pressure over cost of living, former Labor frontbencher Craig Emerson will on Monday release a consultation paper for his independent review into the food and grocery code of conduct, which covers Woolworths, Coles, Aldi and Metcash.