Jim Chalmers admits he has reservations about Turnbull era tax cuts

Jim Chalmers leaves door open to getting rid of tax cuts that have already been legislated.

Jim Chalmers with Anthony Albanese (right) during the Labor Party cabinet meeting yesterday. Picture: AAP.

Labor’s treasury spokesman Jim Chalmers has left the door open to getting rid of already legislated tax cuts if Anthony Albanese wins the next federal election.

The Opposition Leader is continuing to oppose the proposed tax cuts for higher income earners Scott Morrison will present to the parliament next week.

But Bill Shorten also opposed changes legislated by Malcolm Turnbull which will result in a flat rate of 32.5 cents between $41,000 and $200,000 in 2024 and had promised to repeal them.

Today, Dr Chalmers confirmed he still had reservations about those tax cuts already enshrined in law, but said shadow cabinet had not yet decided what it would do about existing tax cuts.

“We have expressed our reservations about the legislated part of stage three,” he told the National Press Club.

“And for all the reasons identified in my speech we are concerned that would be irresponsible to sign up to that five years out when we don’t know what the economy or the budget would look like.

“The decisions that we have taken so far as the shadow cabinet and Anthony’s leadership really revolve around the negotiating position that we announced yesterday.”

Dr Chalmers — a key member of Bill Shorten’s economic team ahead of the May 18 poll — has admitted at the National Press Club that Labor went to the election with too many tax policies.

Mr Chalmers, who was finance spokesman under Mr Shorten’s leadership, said the complexity of Labor’s tax changes left the party open to scare campaigns on its agenda.

“Obviously, we couldn’t build a big enough constituency for our tax proposals; their complexity left us vulnerable to under-the-radar lies and scares about death duties and pension cuts which couldn’t be countered effectively or in time; Clive Palmer’s $60 million of ads didn’t help and we bled too much support to minor parties,” Mr Chalmers said in a speech at the National Press Club this afternoon.

“That saw us get only every third primary vote in Australia and every fourth in my home state where our challenges seemed to be magnified by issues like coal mining, outside of Brisbane.”

Labor’s most senior Queensland MP, who stood next to Chris Bowen and delivered Labor’s final costings a week out from the election, said he did not want to make too many public musings on the election result because it could be “cast as a judgment on individuals”.

“In the Labor Party, we take decisions collectively, and we take responsibility for them collectively. I put my hand up for my role in the things that went wrong,” Mr Chalmers said.

“Clearly one of the consequences of taking so many ambitious policies to the election was that it obscured or even prevented a proper conversation about the Coalition’s substantial failures, not least of which is their stewardship of a weakening economy.”

With Labor holding out support for the government’s income tax package, Mr Chalmers said immediately passing stage one of the package was “important and urgent”.

He said implementing stage three of the tax plan — which would reduce the marginal rate to 30 per cent for workers earning between $45,000 and $200,000 — would require spending cuts.

“Even if there isn’t an economic downturn in that time, the government’s projections also rely on some measures, such as wages and labour productivity, improving dramatically,” Mr Chalmers said.

“If even one thing — one prediction, one assumption — does not materialise in the way the budget hopes — they’re in trouble. Even if things hold up, the last stage of tax cuts can only be funded by budget cuts.

“Those tax cuts require considerable spending restraint at the same time we expect to have to spend more on our ageing population and other pressures. So he needs to explain where the money is coming from and from what other priorities.”