Business warning to ALP on tax cuts block

Anthony Albanese is told the ALP will ‘further ­tarnish’ its reputation with business if it opposes the Coalition’s income tax cut package.

Labor leader Anthony Albanese. Picture: AAP

Anthony Albanese has been warned Labor would “further ­tarnish” its reputation with corporate Australia if it opposes Scott Morrison’s income tax cut package, as business leaders across the nation urge the opposition to ­accept the government’s election mandate to implement its $158 billion plan in full.

Energy Australia chairman Graham Bradley told The Weekend Australian that it was essential to business confidence that Labor delivered bipartisan support for the Prime Minister’s three-tiered tax package. “It is absolutely critical that there is money put into consumers’ pockets at this time,” Mr Bradley said.

The former Business Council of Australia president, who is also the chairman of GrainCorp and HSBC Australia, said the ­Coalition had a “clear election mandate” on the policy. “I believe business fully supports both the direction and the urgency of ­implementing these cuts,” he said. “I think (Labor) will further tarnish their reputation (with business) if they don’t support them.”

Ahead of a shadow cabinet meeting on Monday, at which divided senior MPs are expected to debate Labor’s position on the package, business figures including Solomon Lew, Gerry Harvey, Trevor St Baker and Michael ­Fraser warned the opposition against attempting to block tax cuts for 10 million workers.

The Opposition Leader, who declared last month he would work collaboratively with business, said yesterday Labor was considering supporting the entire package but was demanding more information about its economic impact. “They don’t have a blank cheque,” Mr Albanese said. “And they won’t say what the impact will be on various income groups of these proposed changes. They also won’t say what cuts they will make. If you are reducing ­revenue, you therefore have to ­reduce expenditure.

“We want to know what their plans are, what the proposed full deal is, not just half of it.”

Josh Frydenberg, who recently attended a G20 finance ministers meeting in Japan, said a sluggish global economy made passing the government’s economic agenda critical. “The Coalition’s tax cuts, which provide short-term relief and long-term structural reform, will boost household incomes and ­incentivise workforce participation,” the Treasurer writes in The Weekend Australian.

“This will not only provide greater reward for effort but it also will encourage aspiration.”

Labor went to the election supporting stage one of the government’s plan, which would increase low and middle-income tax offset measures to between $255 and $1080 for workers on up to $90,000 a year. Stages two and three, which Labor has not yet supported, would lift the top ­income threshold for the 19 per cent tax bracket to $45,000 and reduce the tax rate for incomes between $45,000 and $200,000 from 32.5 per cent to 30 per cent.

Finance Minister Mathias Cormann is refusing Mr Albanese’s request to split the bill so stage one can be passed quickly with bipartisan support.

Mr Lew, who chairs Premier Investments, one of the nation’s biggest retail companies, took a swipe at the Labor Party for refusing to immediately heed the ­results of the May 18 election. “The federal ­election is over, and it is now time to implement the key policy the government took to the people, and not re-run campaign arguments which the ­election result emphatically resolved,’’ Mr Lew said yesterday.

“It’s irresponsible to play political games with the prosperity of the country. I can see that confidence is low. You only need to look at the factors that are impacting households to understand their nervousness — declining property values and rising costs of living, particularly ­energy bills, which are only going to get larger. Poor confidence leads to weak spending, and this is having an impact on economic activity and growth.”

Mr Harvey, the executive chairman of Harvey Norman, said tax cuts were needed to buoy the retail ­sector. “The politicians play around with these kinds of things and try to score points, that’s the nature of the beast,” he said.

“But from my point of view business is flat and certainly any moves that anyone makes, on tax, helps. If retail is flat then the whole economy will be flat.”

Mr St Baker, the owner of the Vales Point coal-fired power station in NSW, said the government had a mandate for its proposals. He said there would be another election before later stages of the tax cuts kicked in. “So if this is silly in the future they can change what is going to happen in stage three of these tax cuts,” he said.

Mr Fraser, the chairman of ­energy infrastructure company APA Group and a former AGL chief executive, called for bipartisan support for the tax package. “The Coalition won the election, that is what their platform was and they would rightfully argue they have a mandate.”

But Mr Albanese last night ­rejected that, telling Sky News: “More people voted Labor than voted Liberal at the election.”

He also distanced himself from attacks made by Bill Shorten during the election campaign, saying: “I don’t regard someone who is earning $200,000 a year as being from the ‘top end of town’.

“It’s a good thing that people aspire to get a higher standard of living for themselves and their family. What it’s a question of though is, in terms of the economic policy that’s required, my concern is the government is looking at tax, but what’s their policy on wages?”

The writs for last month’s federal election were returned yesterday and opened the door for Mr Morrison to recall parliament next week to quickly pass his full tax cuts agenda.

The Liberals will have a majority of 77 MPs in the lower house and a strengthened team of 35 senators in the upper house after July 1. Senator Cormann ruled out a return to parliament earlier than the scheduled date of July 2.

The Australian yesterday reported shadow cabinet members would push Mr Albanese to support the package, in line with a public urging from Labor backbencher Peter Khalil. Some Labor Left MPs, including Patrick Gorman, have opposed supporting the entire package, because it would force the opposition to go to the election with lower spending on health and eduction.

The Morrison government needs four out of six crossbenchers in the new Senate to support its tax package if Labor and the Greens oppose it.