Federal politics latest: Labor 'not ruling out' stage three tax cut changes

Anthony Albanese's team is hosing down speculation the government is preparing to rewrite stage three tax cuts, but amending the package has not been ruled out.

Greg Brown and James Dowling

less than 2 min read

January 22, 2024 - 8:48AM

A spokeswoman for the Prime Minister said the government's position on the tax cuts had not changed, ahead of a snap caucus meeting between Labor MPs in Canberra this week. Picture: NCA Newswire/ Gaye Gerard

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PM's word on tax cuts 'means nothing': Taylor

Staff writers

Opposition Treasury spokesperson Angus Taylor says Anthony Albanese's word “means nothing” amid speculation the government is preparing to rewrite stage three tax cuts.

“In terms of broken promises, this one’s really egregious,” Mr Taylor told Sky News.

“The Prime Minister and Jim Chalmers promised they wouldn’t touch these tax cuts 70 times, they are in legislation which was supported by the Labor Party – supported by the Labor Party – and these tax cuts have gone to two elections … and at the last election both Liberal and Labor supported them,” he said.

“Now he’s wasting more money to get his caucus to turn up in Canberra because he hasn't done anything on this for 18 months. He spent the last year focused on his ideological voice, dividing Australians, now he’s discovered there’s a cost of living crisis, well we all knew that some time back.

“He's run out of money so he's chasing yours and that's exactly what he's doing with these extra taxes, and I have no doubt he'll keep going."

Mr Taylor’s comments come as Mr Albanese's team hosed down speculation of looming changes to stage three tax cuts, after a 2GB report that caucus would debate keeping the top marginal tax rate at $180,000, contrary to Labor's election commitment to raise it to $200,000 when stage three begins in July.

Lily McCaffrey

Netanyahu's comments 'deeply disappointing': Watts

Staff writers

Assistant Foreign Affairs Minister Tim Watts says Israeli Prime Minister Benjamin Netanyahu’s comments on Palestinian sovereignty are "deeply disappointing".

In a statement posted to X on Monday, Mr Netanyahu said he would not compromise on Israeli security control of territory west of the Jordan River.

"I will not compromise on full Israeli security control of all territory west of the Jordan River," Mr Netanyahu said.

"As Prime Minister of Israel, I have strongly upheld this position in the face of great international and domestic pressure.

"My insistence is what has prevented – over the years – the establishment of a Palestinian state that would have constituted an existential danger to Israel. As long as I am Prime Minister, I will continue to strongly insist on this. If someone has a different position, they should show leadership and candidly state their position to the citizens of Israel."

Mr Watts told Sky News the only way to resolve the conflict was through a negotiated settlement where Israelis and Palestinians could live side by side.

"The Australian government supports the aspirations of the Palestinian people for self-determination and ultimately for a state of their own," he said.

"We need to appreciate that the only way to resolve this conflict is through a negotiated settlement where Israelis and Palestinians can live side by side in security and prosperity within internationally agreed borders.

“Security responses alone will not resolve this conflict.”

Mr Watts said the government had called out comments that undermined the prospect of a negotiated settlement to the conflict.

“We've called out comments, frankly, like these recent comments from Mr Netanyahu, that undermine these prospects for a long-term negotiated settlement to this ongoing dispute," he said.

“We've also called out other obstacles to peace, like illegal settlement activity in the West Bank.

“And we've made it clear that in a post-conflict world, there can't be any reduction in the size of the territory of Gaza, and there can't be any permanent Israeli presence within Gaza.”

Lily McCaffrey

Labor 'not ruling out' tax cut overhaul

Greg Brown

Anthony Albanese's team is hosing down speculation the government is preparing to rewrite stage three tax cuts, but amending the contentious package has not been ruled out.

A spokesman for Jim Chalmers and a spokeswoman for the Prime Minister both said the government's position on the tax cuts had not changed, ahead of a snap caucus meeting between Labor MPs in Canberra this week.

But they would not directly comment on a report from 2GB radio that caucus would debate keeping the top marginal rate at $180,000, paving the way to junking Labor's election commitment to raise it to $200,000 when stage three begins in July.

The 2GB report also claimed cabinet and caucus would consider lifting the $18,200 tax-free threshold to provide more support for low-income earners.

While Labor sources were casting doubt on the report, they would not deny the government was considering amending the stage three package.

One Labor MP told The Australian they would be open to amending the tax cuts so the benefits for the highest income earners were less generous.

Other MPs are warning against making any changes as it would be breaking an election promise.

Fears of 120km/h winds as Qld braces for cyclone

Agency writers

⚠️Tropical cyclone watch (gales within 48 hours) for the coast between Ayr and St Lawrence. Watch area will increase over time as the system approaches. Severe tropical cyclone (category 3) crossing forecast during Thursday this week. Three hourly updates: https://t.co/FBmpsInT9o pic.twitter.com/MrPia8VYaG
— Bureau of Meteorology, Queensland (@BOM_Qld) January 22, 2024

Queensland is bracing for wind gusts of up to 120km/h and “intense” rainfall as Tropical Cyclone Kirrily builds off the coast – all while battling scorching temperatures climbing into the 40s in some regions.

The Sunshine State is bracing for a hellish week of weather amid forecasts Tropical Cyclone Kirrily will form off the coast, with a chance it will impact near Townsville by midweek.

A Cyclone Watch has been issued for residents as the Bureau of Meteorology predicts the cyclone will form on Tuesday and continue to intensify to a category 3 storm as it approaches the coastline on Thursday afternoon.

Queensland Premier Steven Miles on Monday said “severe” impact was likely if the system crossing occurred near or south of Townsville.

“It’s then expected to lose intensity and weaken, travel south where it could impact with heavy rainfall around central and southeast Queensland,” he said.

Preparations by the state disaster management authorities was under way.

Mr Miles said one of the biggest concerns was the “fatigue” of volunteers and emergency services after the hellish summer of storms.

“We’ll be carefully making sure they have all the support and services they need,” he said.

Dams across the affected regions are also being reviewed for possible water releases should they reach capacity from the heavy rainfall.

Shane Chelepy, the state’s disaster coordinator, urged families to be prepared with the right supplies and stay connected with government messaging.

Laura Boekel from the Bureau of Meteorology said the system would likely reach tropical cyclone-strength by Tuesday.

She said the most likely scenario was for the system to cross between Innisfail and Airlie Beach by Thursday.

BOM is expecting large impacts from the weather system over the long weekend.

“We have issued a Tropical Cyclone Watch… current from Ayr to Saint Lawrence, and that includes Mackay and the Whitsundays as well,” Ms Boekel said.

“Gales with damaging wind gusts of up to 120kmh may develop about coastal communities.

“That could extend beyond Wednesday as that system moves closer.”

Ms Boekel said the system was then forecast to move inland and become a tropical low – dumping a large amount of rainfallon the state.

Areas in central and southern inland Queensland could experience heavy rainfalls as a result.

Mr Miles also warned the state was due to exceed its record power demand on Monday due to the scorching heatwave temperatures across the state.

Energy Minister Mick de Brenni assured there was an “adequate” supply of power for Queenslanders on Monday night as people return home and turn on appliances, such as air conditioners.

“This heatwave has been gathering in scale,” he said.

“There remains adequate supply of power… so (Queenslanders) will be able to continue to use their air conditioners tonight, and other appliances as needs be.

“Of course it will be very, very tight.”

If the cyclone crosses the coast, it’s expected to weaken to a tropical low before moving south over land, bringing heavy rainfall as far south as Brisbane later in the week.

Residents between Ayr and St Lawrence are being urged to prepare for gale-force winds as fast as 120km/h that could develop as early as Wednesday morning.

Heavy to “locally intense rainfall” is also possible in the path of the cyclone, which could lead to flash flooding inland and possibly on the north tropical coast between Thursday and Friday.

As the system tracks south, it could lead to an inland “rain depression” with heavy rainfall across central, southern and southeastern Queensland.

The bureau has also forecast a possible storm tide between Ayr and St Lawrence as the system approaches the coast.

“Large waves may produce minor flooding along the foreshore,” the warning states.

– Madeleine Achenza, Blake Antrobus

Wong congratulates Heine on presidential inauguration

Staff writers

Congratulations to Republic of the Marshall Islands President @Senator_Heine on your inauguration.

A teacher, climate change and human rights champion, I look forward to working with President Heine to strengthen our relationship and advance Pacific priorities. pic.twitter.com/PzJxW3nxlw
— Senator Penny Wong (@SenatorWong) January 22, 2024

The foreign affairs minister, Penny Wong, has congratulated the president of the Republic of the Marshall Islands, Hilda Heine, on her inauguration.

In a post to X, Wong said:

"A teacher, climate change and human rights champion, I look forward to working with President Heine to strengthen our relationship and advance Pacific priorities."

Yesterday, Assistant Minister Patrick Gorman travelled to the Republic of the Marshall Islands to represent Prime Minister Anthony Albanese at the inauguration.

Mr Gorman said “our strong ties are built on longstanding defence and development cooperation, and in our work together advancing the interests of across the Blue Pacific.”

New gas deal to drive down energy prices

Agency writers

Energy Minister Chris Bowen. Picture: NCA NewsWire / Gaye Gerard

A major deal has been inked between the east coast’s largest LNG producer and the Albanese government in a bid to stem the risk of gas shortages that threaten to drive energy costs for households and businesses.

On Monday, Energy Minister Chris Bowen and Resources Minister Madeleine King announced new gas supply contracts of more than 260 petajoules – equivalent to 2½ years of gas-powered generation demand – up to 2033 that would be pumped from the Bass Strait Project.

Operated by ExxonMobil’s local subsidiary, Esso, and part-owned by Woodside, the project consists of gas fields in the Gippsland Basin off the southeast coast of Victoria.

Regulators have previously cautioned that consumers in Australia’s southern states could face gas shortages from 2028, threatening to send energy bills even higher.

“Transporting gas from Queensland to the southern states will be increasingly important to cover these potential supply gaps,” the Australian Competition and Consumer Commission said in its gas inquiry interim report released in December.

If left unaddressed, a shortage of gas would heighten the risk of blackouts, energy market analysts have cautioned, as gas-powered electricity generators may be unable to operate during peak demand periods and meet electricity supply shortfalls.

The additional gas will help shore up supply to the wholesale market, where power generators and energy distributors – rather than households and small businesses – can purchase gas. Lower wholesale prices should ultimately lower energy bills.

The agreement with Woodside and Esso marks the second round of exemptions under the government’s Mandatory Gas Market Code.

In November, APLNG and Senex also signed supply contracts, bringing the total volume of gas secured through the code to 564PJ – roughly equivalent to the east coast’s annual domestic gas consumption excluding LNG for export.

The code, which came into force in July 2023, sets a price ceiling of $12 a GJ to ensure certainty for the producers and wholesale users.

However, suppliers can exceed the cap, subject to ministerial approval, if they prioritise sending gas to Australia’s east coast market rather than abroad.

Mr Bowen said the additional supply would help lower prices, as Australia’s energy mix was increasingly powered by renewable generation.

“The Albanese government’s gas code has now delivered commitments for gas supply that’s equivalent to what is needed for powering east coast gas power stations for five years,” Mr Bowen said.

Further exemptions under the code to secure additional supply are also being assessed by the federal government.

Opposition energy spokesman Ted O’Brien said the announcement was a concession on the part of the federal government that the code of conduct was failing to boost supply.

“What has proven to be the case is you can’t get gas flowing in this country unless you work outside of Labor’s own framework,” Mr O’Brien said.

“The only way you can get gas flowing in this country is if companies are given the opportunity to work outside of the policy framework Labor itself has put in place.”

“The deal that was announced today doesn't get so much as one additional petajoule into the domestic market that wasn't already destined for the domestic market.

"If anything, they've sort of uncorked the blockage that had been created by their code of conduct through the exemptions, and that's a good thing."

Ms King said gas was “insurance” for the energy grid.

“Gas is essential to supporting the nation’s energy grid and the reliable supply of gas is crucial to keeping energy prices down for households and businesses,” Ms King said.

“Gas is also indispensable in the processing of critical minerals and technologies such as wind turbines and solar panels.”

The ministers said the additional supply would directly feed into southern demand centres and ensure there was sufficient domestic supply to keep the downward pressure on gas prices.

– Jack Quail and Lily McCaffrey

Worrying homeowner trend amid rising rates

Agency writers

Finder research revealed mortgage holders with significantly higher costs were increasing their mortgage term to reduce monthly repayments. Picture: iStock

More than one in three Australian households are struggling to pay their home loans in the new year and a concerning trend is emerging among refinancers as a result.

New Finder research found 1.1 million mortgage holders were “struggling to pay their home loan in January”, up 24 per cent from January 2022.

While the percentage of homeowners struggling to meet payment deadlines is down from a record high of 41 per cent in June 2022, 35 per cent of Australian households are still battling to make monthly payments towards their mortgage.

Finder research revealed mortgage holders with significantly higher costs were increasing their mortgage term to reduce monthly repayments, a trend that concerned experts.

Finder home loan expert Richard Whitten warned that while refinancing could “free up some spare cash” it could prove a costly move long term and urged homeowners to remain cautious.

“Review your existing home loan to make sure you’re not paying more than you need to and pay attention to what your lender is offering new customers,” Mr Whitten said.

“Try to negotiate it down with your current lender but also remember to look at what rates other lenders offer because you may find a better deal.

“You can try to stick to your original loan’s term if you do decide to refinance so it doesn’t reset the clock, or you can start a new 30-year term but focus on keeping your repayments higher than the required monthly repayment.

“Your aim should be to pay off the new home loan faster either with extra repayments or better yet by building up your offset account.”

The data found 18 per cent of refinancers extended the length of their home loan when they refinanced and added 3.5 years onto their home loan when switching banks.

Mr Whitten said it was vital Aussies chose a home loan that would offer them the best deal as homeowners worked to keep their finances on track.

“Millions of Aussie borrowers are experiencing financial stress due to the fact that their monthly mortgage repayments have blown out so rapidly,” Mr Whitten said.

“The start of the year is a great time to assess where you might be able to save. Your home loan is the best place to start, as it’s likely your biggest expense.”

– Tess McCracken

PM calls for 'cohesion' amid Israel-Hamas conflict

James Dowling

Anthony Albanese has called for Australia to remain “a cohesive society” following divisions brought on domestically by the Israel-Gaza conflict.

“A big challenge for Australia is to make sure that we remain a cohesive society and that we don't bring anger and conflicts here, that we continue to give respect to people regardless of their faith, regardless of their ethnicity and their backgrounds,” the Prime Minister said in an interview with Sky News.

“That can be very difficult. I know that the Jewish community after the October 7 terrorist attack by Hamas, have been feeling very vulnerable. For many members of the Palestinian and Islamic communities who have relatives in Gaza as well, it's a very difficult time.

“We need to make sure that we respond in an appropriate way. Call out antisemitism when we see it, call out Islamophobia when we see it as well.”

The PM’s call for “social cohesiveness” comes shortly after Foreign Minister Penny Wong’s diplomatic trip to Israel, and during a period of recurring pro-Palestinian protests.

“I have continued to engage with people who are affected by this, and I know that the concerns are very legitimate,” Mr Albanese said.

“But I want social cohesiveness here to be an absolute priority, and for us to continue to be prepared to have respectful debates, and I know that that is something that has been an absolute priority for me.”

'We respect democratic processes’: PM on Trump

James Dowling

Prime Minister Anthony Albanese is confident that if former US president Donald Trump came to power following the 2024 US election, the AUKUS agreement would remain intact.

“The AUKUS relationship is quite extraordinary. (There were) a range of front page stories across newspapers questioning whether the AUKUS legislation would go through the US Congress, well that happened last year,” the Prime Minister said in an interview with Sky News.

“The United States is a nation of which we have no closer ally. I have a good relationship, obviously, with President Biden. But we respect those democratic processes in the United States, we'll deal with whatever the outcome.

“We will work with whatever the outcome is because the relationship between Australia and the United States is not just a relationship between individuals or leaders. It's a relationship between our peoples, and it's based upon the democratic values that we share, the cause of freedom that we have fought for together.”

Mr Albanese also spoke on the recent request by the Ukrainian government for the Albanese government to match a previous shipment of almost 80,000 tonnes of coal, to prevent energy insecurity over their spring.

The PM said the government is currently considering the request, and hasn't decided whether or not they will supply the coal.

“We are already very significant contributors to the Ukrainian efforts to defend their sovereignty and to defend their democracy. We have been very clear, with measures of economic support,” he said.

“We will continue to engage in a mature, considered way with Ukraine, and we stand with Ukraine for as long as it takes.”

Investor 'handouts' worsening housing crisis: report

Agency writers

We need to start treating housing as something everyone should be able to afford. @_EverybodysHome report shows we could have built more than half a million social & affordable homes instead of using taxpayer money to subsidise property investors. pic.twitter.com/WWhqSd54vk
— David Pocock (@DavidPocock) January 21, 2024

Tax breaks for property investors have created a quarter of a trillion dollar budget black hole that could instead fund 500,000 new social homes, a new report has found.

Everybody’s Home, a national campaign to “fix the housing crisis”, is calling on the government to scrap negative gearing and capital gains tax concessions in favour of building more social housing.

It has warned the housing affordability crisis will only worsen if the government doesn’t switch tack from supporting the private market to investing in homes for people being increasingly priced out of the sector.

The latest report proposes a regime of tax reform, finding concessions are on track to cost the budget about $228bn from 2010 to 2033, and that tax breaks for investors have outstripped federal funding on social housing by at least five times.

The report found investment in social housing under Commonwealth-State housing agreements is less today than it was 40 years ago, and that housing policy has been “geared towards subsidising the private market” rather than directly supplying social housing.

The campaign says the cost of those investor tax breaks could build 549,310 social homes over the next decade.

“Taxpayers are being ripped off by property investor write offs. The federal government is spending record amounts on housing to line the pockets of investors. That has made renting and buying homes more expensive than ever,” Everybody’s Home spokesperson Maiy Azize said.

“Tax handouts for investors will be a quarter of a trillion dollar mistake if the government doesn’t change tack. Giving money to investors is a choice. If the government wants to make housing more affordable and fairer for all Australians, it can choose to put money into homes instead of investor profits.

“The government must scrap negative gearing and capital gains tax concessions, and use the revenue savings to build hundreds of thousands of social homes. This would help end Australia’s massive social housing shortfall, and help reach the goal of another one million social homes within the next 20 years.

“Governments must take back responsibility to make housing affordable. It’s time to abolish unfair tax handouts and build the homes we need.”

Negative gearing allows investors to deduct losses incurred on investment properties, such as from interest rates and maintenance, therefore, reducing their overall tax bill.

Under the capital gains tax concessions, tax is levied on only 50 per cent of the capital gain of an asset held for more than one year.

The Greens last year published Parliamentary Budget Office costings that estimated property tax concessions would cost $37.5bn in lost revenue in 2023-24, while capital gains tax discounts were estimated to cost $1.5bn.

The Albanese government’s centrepiece housing policy, the Housing Australia Future Fund, passed in September after months of negotiations with the minor party, with a guaranteed $500m to be spent each year on building new and affordable social homes.

The government last year also announced a separate $2bn Social Housing Accelerator, and increased the Commonwealth Rent Assistance payment in the May budget.

But the Greens want the government to invest even more in social housing, with acting Greens leader Mehreen Faruqi vowing the minor party would keep pushing the government to overhaul the tax concessions.

“These tax breaks are turbo charging the housing crisis, making it easier for wealthy property moguls to buy a property than a first homebuyer, driving up property prices and depriving the government of revenue that could be put to work building housing for those who need it,” she said.

“It is an indictment on Labor’s priorities that they think that $39bn on tax breaks for wealthy property moguls is a reasonable investment, but won’t spend more than $3bn on public housing, as the crisis continues to worsen.”

Prime Minister Anthony Albanese – who famously grew up in social housing – came under fire last year after internal pressure within the Labor Party called for reform on investment property tax concessions.

He dismissed calls to reform the tax concessions, and said he would not revisit the party’s negative gearing policy before the next election, due next year.

“The government’s position is very clear, and it’s a position for which we received a mandate at the 2022 election – and I’m someone who keeps the commitments that we made,” Mr Albanese said last May.

Mr Albanese instead has regularly pointed to the government’s other housing commitments, including building social housing.

Treasurer Jim Chalmers was contacted for comment but did not respond before deadline.