Labor MP Peter Khalil calls for party to back tax cuts agenda

Anthony Albanese calls snap shadow cabinet meeting amid tensions over income tax cuts.

Labor MP Peter Khalil has called for his party to support the government’s tax cuts agenda. Picture: Ian Currie.

Anthony Albanese has called a snap shadow cabinet meeting next Monday amid growing tensions in Labor over personal income tax cuts.

A Labor MP said the meeting was called at short notice ahead of a caucus meeting in Canberra the following Monday before parliament resumes.

The move comes after Labor MP Peter Khalil called on the Opposition Leader to pass the full tax plan of the government refused to split the bill.

Mr Khalil’s stance is backed by senior members of the opposition frontbench, with one leading MP telling The Australian this morning Labor should “wave the tax cuts through.”

“Otherwise, we just become the issue. They have a mandate for the tax cuts,” the MP said.

But Anthony Albanese has been publically wary of backing the third tranche of tax cuts for higher income earners and demanded more details from the government over the cost to the budget.

Mr Khalil, an inner-city Melbourne MP, today warned Labor could not ultimately deny Australian voters tax cuts they were promised, even though he believes the government should split the bill because the third round of tax cuts are “on the never-never.”

“In the scenario that looks increasingly likely, which is that they will not split the tax cut package, my view is Labor should not block tax cuts that will benefit millions of working and middle-class Australians,” Mr Khalil told the Herald Sun.

“If that means we are not given any choice other than to pass the entire package then that is what we should do.”

Mr Khalil’s intervention is the first time a Labor MP has publicly backed pushing through the government’s tax cuts and could signal a widening split in the Opposition on the way forward for the economy.

It comes as Labor MPs and strategists, led by frontbencher Joel Fitzgibbon, called for more freedom to publicly express views that are counter to opposition policy.

Mr Khalil’s intervention was welcomed by Finance Minister Mathias Cormann, who called on Mr Albanese to follow the MP for Wills’s lead.

“Bravo @PeterKhalilMP!” the Finance Minister tweeted.

“Our plan for income tax cuts for all working Australians is in our national interest. We won’t split it and we urge all Labor MPs to follow your strong lead.”

Bravo @PeterKhalilMP !

Our plan for income tax cuts for all working Australians is in our national interest. We won’t split it and we urge all Labor MPs to follow your strong lead.

RT: We have ‘no choice’ but to pass full tax cuts: Labor MP https://t.co/fEfSdvl94l #auspol

— Mathias Cormann (@MathiasCormann) June 19, 2019

West Australian Labor MP Anne Aly yesterday declared Australia could not afford the high-income tax cuts because it was in a “recession”.

The backbencher’s claim was slammed by Finance Minister ­Mathias Cormann, who described her comments as “recklessly irresponsible and wrong”.

Pressed on why she would not endorse stage three of the government’s plan, which from 2024-25 lowers the tax rate from 32.5 per cent to 30 per cent for those earning $45,000 to $200,000, Dr Aly told Sky News: “What about the fact that our economy is now in a recession, or it looks like it is going into a recession?

Labor’s treasury spokesman Jim Chalmers backed Dr Aly, declaring Australia was in a per capita recession and urged Senator Cormann to focus on “fixing” the economy rather than attacking his colleague.