Anthony Albanese revels in tax win on first day

Anthony Albanese has landed a significant political blow ahead of the Dunkley by-election after Peter Dutton and the Coalition agreed to pass Labor’s revamped stage three tax cuts package.

Opposition Leader Peter Dutton, with opposition treasury spokesman Angus Taylor and opposition finance spokeswoman Jane Hume, in Canberra on Tuesday. Picture: Martin Ollman / NCA NewsWire

Anthony Albanese has landed a significant political blow ahead of the Dunkley by-election after Peter Dutton and the Coalition buckled to pressure and agreed to pass Labor’s revamped stage three tax cuts package.

A re-energised Prime Minister and his Treasurer Jim Chalmers goaded the Opposition Leader during a tense question time on Tuesday, trading barbs with Mr Dutton over the Coalition’s backdown and deflecting attacks they are preparing tax raids on negative gearing and the family home.

After ending last year mired in political crises, Mr Albanese’s legislative tax cuts victory at the start of this year will be capped by the expected passage of sweeping, union-backed industrial relations changes and an address to parliament on Thursday by PNG Prime Minister James Marape.

Mr Albanese, who earlier joined Mr Dutton at the St Andrews Presbyterian church in Canberra for an ecumenical service marking the first day of parliament for 2024, accused the Coalition of abandoning the ­Morrison government’s legislated stage three package.

Seizing on the ABC’s Nemesis program, which on Monday night focused on the 2018 leadership battle between Mr Dutton and Malcolm Turnbull, Mr Albanese mocked his counterpart.

“His big commitment to be made leader was that he’d smile more. It was going to be like Little Miss Sunshine … instead, he gave us Jack Nicholson in The Shining. You know, smashing through the walls. Hereeeee’s Peter,” Mr Albanese said.

“Hatred. Full of negativity. Full of abuse. C’mon. If you were fair dinkum you’d vote against our measure and you’d commit to roll it back.”

Mr Albanese also took aim at deputy Liberal leader Sussan Ley for her initial response to the Labor tax overhaul, quoting her promise to fight the government’s legislation in the parliament.

Dr Chalmers, who tabled the tax cuts bill in parliament on Tuesday, took aim at Mr Dutton for agreeing to support the revamped tax package despite calling for an early election over the issue after the stage three overhaul was first unveiled.

“Their position has been indefensible, unintelligible, incoherent and unsustainable. The Opposition Leader called for an election on a policy that he is now voting for. That would be a pretty strange election,” the Treasurer said.

After the Coalition joint partyroom agreed to ultimately rubberstamp Labor’s stage three overhaul, Mr Dutton flagged a crackdown on government waste and cuts to the ballooning public service to help fund a new tax reforms election package combating bracket creep.

Mr Dutton didn’t rule out indexing tax thresholds and insisted he was not abandoning the legislated stage three tax cuts despite the Coalition agreeing to wave through Mr Albanese’s revamp if its amendments fail.

Facing a political wedge just over three weeks out from the Dunkley by-election, Mr Dutton said the “Coalition is not going to stand in the way of providing ­support to Australians who are doing it tough”.

“The Prime Minister’s made this change for his own political survival. We’re supporting this change not to support the Prime Minister’s lie, but to support those families who need help now.”

The Coalition’s position on Labor’s overhaul – which applies a 30 per cent tax rate to incomes between $45,000 and $135,000 and retains the 37 per cent tax rate for incomes of $135,001 to $190,000 – means the government won’t need to negotiate with the Greens or the Senate crossbench. Under Labor’s rewrite, the low-income tax rate on incomes of $18,200 to $45,000 is reduced from 19 per cent to 16 per cent.

Mr Dutton said if the Coalition reinstated the original stage three tax cuts applying a 30 per cent flat tax rate for those earning between $45,000 to $200,000, in addition to Labor’s changes, they would need to find $9bn a year to fund it.

“(This) is no easy task. There are savings we can identify from government waste, in administered programs for example,” Mr Dutton said, noting the government was already spending $92bn annually on federal departments.

“They’ve increased by 10,000 the number of public servants here in Canberra. There are ways in which you can provide some savings. (But) we’d be reckless to come to you today with a policy that’s not costed and that runs to $9bn a year. I don’t think we can credibly say that we’re in a position to put forward that modified package today.”

As Mr Dutton ramped up his “liar in the Lodge” attack against Mr Albanese, opposition Treasury spokesman Angus Taylor said the Coalition would take tax reforms “in keeping with the stage three tax cuts” to the next election.

He said the plan, which remains under development, would “deal with that insidious thief in the night (bracket creep) that is taking money from Australians”.

“Personal income tax is up 27 per cent in 18 months and, frankly, Australians are paying a higher price for that. At the next election, you will see strong policies from us on tax reform in line with the principles of the stage three tax cuts,” Mr Taylor said.

Scott Morrison – whose retirement from federal politics is imminent – gave the partyroom his blessing to pass Labor’s plan, telling colleagues to do what they had to do while noting he wasn’t going to be around.

Following the partyroom decision, opposition finance spokeswoman Jane Hume said Mr Albanese broke a promise to the Australian people that he had “repeated over 100 times”.

“Clearly, Anthony Albanese is banking on bracket creep. He is taking money from our future prosperity, from all Australians’ future prosperity, and sucking the aspiration out of our economy,” Senator Hume said.

“I can guarantee you … that for the next election, the Coalition will have delivered a tax policy that implements lower, simpler, and fairer taxes.”