Budget 2020: Labor MPs say gloves are off if Anthony Albanese retreats on tax

Labor MPs will urge Anthony ­Albanese not to propose changes to the government’s ­income tax plans ahead of the next election.

Anthony Albanese with local members Sharon Bird and Fiona Phillips at BlueScope Steel in Wollongong on Tuesday. Picture: Simon Bullard

Labor MPs will urge Anthony ­Albanese not to propose changes to the Morrison government’s ­income tax plans ahead of the next election, after the Opposition Leader signalled he may go to the poll opposing $130bn worth of tax cuts.

Senior Labor Right MPs have told The Australian it would be a mistake for the party to go to the election vowing to repeal stage three of the government’s income tax plan, due to begin in 2024.

“How could we go to the next election standing between workers and a tax cut?” a senior MP said. Another said: “I thought we were giving up on class warfare?”

Other Labor MPs, from both the Right and Left factions, say they will argue for the package to be amended to become more favourable to low- and middle-­income earners.

Opposing stage three — which would flatten the top tax bracket to a maximum rate of 30 per cent for all workers earning between $45,000 and $200,000 — would give Labor an extra $130bn in its spending arsenal but leave the party vulnerable to accusations it wants to increase taxes.

Labor MPs have told The Australian the party’s position on the stage-three tax cuts will involve a major fight, with some in the party deeply uncomfortable about the amount of relief going to high-­income earners.

There is likely to be more ­resistance to backing stage three than dropping major revenue measures taken to the last election, such as clamp downs on negative gearing, capital gains tax and franking credits.

Mr Albanese on Monday night flagged he would propose changes to the package as he criticised the $80bn of tax cuts going to the ­“really high end”.

“I think it’s very hard to argue, in the current circumstance, for high-end tax cuts. That’s my view. We will look at the detail and make an announcement at an ­appropriate time,” Mr Albanese told ABC’s Q&A program.

“Our concern is that about $80bn of that is really at the high end. If we are going to pay back the debt but we are to decrease our revenue … then you have to have a path back to pay back that debt.”

Scott Morrison responded by saying Mr Albanese was a “reheat” of Bill Shorten and would tax Australians more. “I’m not surprised Anthony Albanese wants to take away people’s tax cuts,” he said. “These tax cuts mean if you’re earning $50,000 a year, then you’ll be paying 30c on every extra dollar you earn, not 32.5c. These tax cuts ensure 90 per cent of Australians won’t pay more than 30c for every dollar.

“This is just a reheat of Bill Shorten … when you always hear they want to spend more, always know that they want to tax you more. That’s how it always works with Labor.”

Also on Monday night, Mr ­Albanese indicated Labor might not be drawn into landing on a medium-term emissions target until the UN Climate Change Conference, which will be held next year, potentially after a federal election.

He confirmed Labor would not have a 2030 target and said the party would go to the election ­either with a 2035 target or a “pathway” to net-zero emissions by 2050.

“We will have a plan and pathway consistent with zero-net emissions by 2050,” Mr Albanese said.

“We will wait to see what happens at the next UN Climate Change Conference next year.”