Centre Alliance ready to back full tax plan

Centre Alliance has signalled it may back the full income tax cuts package as soon as Friday.

Centre Alliance senator Rex Patrick. Picture Matt Turner

Centre Alliance has signalled it could support the Morrison government’s full personal income tax cuts package as soon as Friday without a deal on gas being locked in, as Labor also leaves open the possibility of backing the flagship $158 billion tax plan in full.

Stirling Griff, who with Centre Alliance colleague Rex Patrick holds two crucial Senate seats, told The Australian the minor party was “confident of a positive outcome” on gas and expected negotiations with the government to be finalised “in the coming days”.

Centre Alliance has demanded measures to reduce gas prices so the government’s tax cuts, the first stage of which is due to kick in next Monday, are not chewed up by rising energy costs.

“We appreciate the economy needs a stimulus and we’re supportive of the tax cuts that will bring about that immediately. We may well support the whole package,” Senator Griff said.

Asked if a new government gas policy, which could include a modification of the Australian Domestic Gas Security Mechanism or an east coast gas reserve, had to be completed before Centre Alliance voted for the tax cuts, Senator Griff said: “Not necessarily. It’s all about intent and a plan. It’s unlikely for a lot of things to be resolved in a short space of time, but as long as it’s going in the direction it needs to go that will give a positive outcome; that works for us.”

Senator Patrick added the party wanted a “clear understanding” of the government’s intention on gas, and the details in writing, before supporting the tax cuts.

Speaking at the National Press Club yesterday, opposition Treasury spokesman Jim Chalmers said Labor had not decided if it would wave through the government’s legislation if its proposed amendments failed.

He also declared Labor was undecided on whether it would go to the next election vowing to repeal $42bn of tax cuts already legislated under Malcolm Turnbull’s leadership, which was a flat marginal tax rate of 32.5 per cent for incomes between $41,000 and $200,000.

“I’m not convinced that income tax cuts were as big a part of the election campaign as what the government now likes to pretend,” Dr Chalmers said.

“Even if there isn’t an economic downturn in that time (between now and the final stage of the tax cuts being rolled out in 2024-25), the government’s projections also rely on some measures, such as wages and labour productivity, improving dramatically. Even if things hold up, the last stage of tax cuts can only be funded by budget cuts.”

Acting Treasurer Simon Birmingham said Labor’s “extraordinary decision” to leave the door open to repealing legislated tax cuts showed the party did not learn the lessons from the election.

“There is a clear message for Anthony Albanese and the entire Australian Labor Party; wake up, hear the sentiment of the Australian people who want lower taxes not higher taxes. Recognise the agenda you took to the last election of having higher taxes was roundly rejected by the Australian people,” Senator Birmingham said.

One Nation leader Pauline Hanson, who also controls two seats in the upper house, reaffirmed her intention to block the government’s tax cut package in its entirety if the bill were not split.

Additional reporting: Joe Kelly