‘Brace for an attack on negative gearing’, warns Peter Dutton

Peter Dutton has escalated his attack over Labor’s broken tax promise, warning Australians to brace for further backflips over negative gearing and franking credits.

Opposition Leader Peter Dutton. Picture: Getty Images

Peter Dutton is urging Australians to brace for further policy changes over investment properties, franking credits and the family home following Labor’s stage three about-face, with Finance Minister Katy Gallagher on Thursday unable to rule out any changes to negative gearing.

The Opposition Leader said Labor was engaged in “wealth redistribution” and an “attack on aspiration”, which was about “pitching one Australian against the other”, given the tax revamp would leave those earning more than $146,500 worse off in order to fund larger tax breaks for those on lower incomes.

He did not reveal whether the Coalition would support or oppose Labor’s tax changes in the parliament, with Anthony Albanese telling Mr Dutton to “just get out of the way” and allow the package through.

The Prime Minister on Thursday also denied the tax revamp would delay interest rate relief, with inflation plunging to a two-year low of 4.1 per cent in the year to December and fuelling expectations of rate cuts from mid-year.

Jim Chalmers on Thursday said the tax revamp would boost workforce participation and increase labour supply by around 930,000 hours a week – the equivalent of 25,000 full time jobs – as the government promotes the overhaul ahead of a resumption of parliament next week.

In an address to Labor-aligned think tank The McKell Institute, the Treasurer defended the government’s revamp as a reform to the tax system because it returned bracket creep “where it has the most impact”.

“As a result, the average taxpayer will pay $21,635 less of their income in tax over the next decade,” he said in Brisbane. “Second, our plan boosts labour supply and incentives to work.”

“Treasury estimates our changes will increase labour supply by around 930,000 hours per week. That’s the equivalent of 25,000 full-time jobs, which is more than double the labour supply impact of the old stage three,” Dr Chalmers said.

“Third, our changes deliver more for women: 5.8 million women, or 90 per cent of taxpaying women, will receive a bigger tax cut under our plan.”

Dr Chalmers said the changes would not harm the budget position or add to inflationary pressures but would leave teachers, nurses, aged and disability carers and early childhood educators better off.

On 2GB radio, Mr Dutton said Dr Chalmers had “this cute form of words around negative gearing and dividends and the family home … All of that now – I think people can reasonably say they are worried that changes are coming,” he said.

“If they come out and say we are going to cap negative gearing or abolish negative gearing or change capital gains arrangements, all they will do is kill confidence in the economy.”

Mr Dutton said Dr Chalmers was on a crusade to “be Robin Hood”, and accused Labor of being locked in a contest with the Greens to win the left-wing, inner-city vote.

Grilled by Karl Stefanovic on Nine’s Today, Senator Gallagher refused on four separate occasions to rule out changes to negative gearing amid speculation Labor could target other costly tax concessions.

Pressed on the issue, Senator Gallagher was unable to say there would be no changes to negative gearing and could only provide an assurance the government had “no plans” to do so.

Pressed a second time to rule out changes to negative gearing, she said: “It’s not my government. It’s the Albanese government and we have no plans on negative gearing. It’s just not on our ­agenda at all.”

Mr Albanese also ruled out horse trading with the crossbench on the stage three tax cuts overhaul, saying on Thursday that any increase to JobSeeker would be considered as part of the budget process.

The Australian revealed on Thursday that Greens leader Adam Bandt was considering demanding an increase to JobSeeker in exchange for his party’s support for the revamped stage three but Mr Albanese said: “We’re not going to trade.”

“This (an increase to JobSeeker) is something we consider in every budget, I’ve said that,” he old ABC radio. “We had a significant increase in the last budget on JobSeeker, of Youth Allowance, of Parenting Payment.”

Mr Albanese also rejected the notion that the March 2 Dunkley by-election would act as a referendum on Labor’s stage three overhaul, even though it will be the first time that voters will be given an opportunity to voice their thoughts on the policy at the ballot box.