Internal tax cut row blunting attacks on NDIS, Labor MPs warn

Labor MPs warn internal division over tax cuts is blunting opposition ­attacks over penalty rates, NDIS cuts.

Opposition Treasury spokesman Jim Chalmers. Picture: Kym Smith

The fate of Scott Morrison’s flagship $158 billion tax cut package will be decided by parliament within days, as Labor MPs warn Anthony Albanese that internal division is blunting opposition ­attacks over penalty rate reductions and cuts to the National ­Disability Insurance Scheme and other services.

Labor has agreed to vote on the package by Friday after the Opposition Leader was accused of “learning nothing” from the May 18 election defeat in the wake of his refusal to back in all three phases of the government plan.

If passed, the package would immediately deliver $1080 in tax relief to lower- and middle-income earners.

Amid growing confidence the Coalition will secure Senate crossbench support from Jacqui Lambie, Cory Bernardi and Centre Alliance’s Rex Patrick and Stirling Griff, Josh Frydenberg last night claimed Labor was blocking tax cuts for Australians.

“Anthony Albanese has learned nothing from his election defeat and heard nothing on his listening tour,” the Treasurer said.

“The Australian people voted in favour of the Coalition’s tax cuts and rejected Labor’s $387bn of higher taxes. This was Anthony Albanese’s first test and he failed.”

Mr Morrison will meet Mr ­Albanese this week to discuss a range of issues.

Senior cabinet ministers and Mr Frydenberg, who will today ­introduce the tax cut legislation in the House of Representatives, have spoken to Senator Lambie, who holds the final crossbench vote needed to pass the plan in full.

Without the support of Labor or the Greens, the government has to win over four of the six Senate crossbenchers to pass legislation. It appears to be on the verge of securing the numbers off the back of new measures to reduce gas prices.

One Nation, which has two Senate seats, yesterday maintained its opposition to the entire tax package but has left the door open to discussing the economic benefits of stages one and two of the plan.

Under pressure from industry leaders and senior Labor frontbenchers to support the tax cuts package, Mr Albanese is expected to reconvene his shadow cabinet on Thursday if the Senate rejects opposition amendments aimed at splitting the government’s bill.

Labor wants to bring forward tax cuts scheduled for 2022-23 and carve-out stage three, which from 2024-25 lowers the tax rate from 32.5 per cent to 30 per cent for Australians earning between $45,000 and $200,000.

The third phase costs the budget $95bn to 2029-30.

Manager of opposition business Tony Burke has told Labor MPs to remain in Canberra on Thursday night so the tax cuts legislation can be brought back to the chamber and voted on if ­needed.

Sources close to crossbench ­negotiations said Senator Lambie saw value in proposals to make domestic gas more affordable, which Centre Alliance has demanded in exchange for its vote.

Centre Alliance supports an east coast gas reserve and a modification to the Australian Domestic Gas Security Mechanism, which can be used to force exporters to quarantine gas for Australian consumers.

Centre Alliance wants the ADGSM to be able to be triggered based on price rises, not just on supply.

“Whether it’s a combination of both those (policies) or other ­options, it’s important to make sure there’s enough gas in the market and available at competitive prices rather than significantly inflated prices,” Senator Griff said.

“The crazy thing we’ve got now is we’re producing it at under $4 a gigajoule, yet we’re paying up to three times as much because of the way the current system works.”

In his first formal parliamentary caucus meeting as leader, Mr Albanese yesterday took the ­extraordinary step of warning colleagues against leaking, declaring his MPs must speak with a “single voice”.

Mr Albanese, who conceded Labor fell short of expectations in Victoria and Western Australia at the election and suffered large swings against it in Queensland, described stage three of the government’s tax plan as an “attempt to permanently reduce the help that government is able to give people”.

Mr Albanese told colleagues: “What happens in a few years’ time when $95bn disappears from government revenue?”

Opposition Treasury spokesman Jim Chalmers — labelled by Mr Frydenberg yesterday as the co-architect of Labor’s $387bn election tax agenda — left the door open to backing Mr Morrison’s ­income tax plan if its amendments failed in the Senate.

“We’re going to put all of our ­effort into our amendments. If those amendments are unsuccessful, then we will consider our ­options at that point,” Dr Chalmers said. “If the government votes against our amendments tomorrow night, they will be voting against every Australian worker getting a tax cut this term.

“If the government votes against our amendments, they will be saying that tax cuts in five years’ time are more important than tax cuts which could start this week.”

Mr Morrison, who will hold a joint Coalition partyroom meeting this morning, will use the first sitting week of parliament since the election to ram through his tax package. The government plans to introduce legislation to repeal the Medivac bill in the lower house on Thursday.

Mr Frydenberg said the ­Coalition tax plan would provide immediate relief for those earning up to $126,000 and long-term reform, that would “see 94 per cent of all Australian taxpayers pay a marginal rate of tax that is no higher than 30 cents in the dollar”.

If the legislation passes through parliament and receives royal ­assent, people lodging their tax returns for 2018-19 will be eligible for immediate tax relief within “days, or weeks”.