Liberals eye tax cuts as Angus Taylor prepares pre-budget blitz on marginal seats

Angus Taylor is raising expectations a Dutton government would deliver income tax cuts in its first term, ahead of a marginal seat blitz attacking Labor’s economic agenda.

Opposition treasury spokesman Angus Taylor and Treasurer Jim Chalmers.

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Peter Dutton’s Treasury spokesman, Angus Taylor, is raising ­expectations that a Coalition government would deliver ­income-tax cuts in its first term, by releasing research showing the average Australian worker paid $3500 more tax last financial year than before the Albanese government was elected.

Mr Taylor will blitz marginal seats this week in a pre-budget campaign against the government’s economic agenda, claiming Jim Chalmers’ revamp of the stage three tax cuts has failed to reduce bracket creep and left workers on track to pay an extra $8900 in tax by the end of the decade.

The campaign over bracket creep comes despite the ­Coalition refusing to say ­whether it will go to the election offering income tax cuts.

Liberal MPs fear it is increasingly likely the Opposition Leader will not put forward a tax-cut policy before the May election due to concerns about debt and the political risk of balancing the books through unveiling big cuts to government expenditure.

But even if Mr Dutton does not release a pre-election tax cut package, Mr Taylor’s claim that workers will pay nearly $9000 more income tax by 2028-29 under the current settings will put the onus on a ­Coalition government to deliver relief for workers.

Mr Taylor will declare that dual-income households are paying an extra $7000 in taxes because of bracket creep under Anthony Albanese, as he ­campaigns this week in the battleground seats of Aston, Goldstein, Bass, Lyons, Braddon, Parramatta, Bradfield and ­Werriwa.

Flagging plans to run a campaign claiming Labor had secret plans to raise taxes after the election, Mr Taylor said the government had “broken every promise on tax it made before the last election”. He said Labor’s only plan to fix the budget was to “take from family budgets to ­bolster their own”.

“It is clear taxes are on the rise if Labor’s policy settings continue,” Mr Taylor said.

“Labor abolished the (tax-to-GDP) cap in its first budget; the Coalition will restore it. This upcoming budget must restore a tax-to-GDP cap and fiscal guardrails to reduce wasteful spending so Australians don’t face higher taxes on top of higher inflation.

“Australians cannot afford ­another three years of Labor’s economy.”

Mr Taylor’s pre-budget blitz comes a week after some ­Coalition MPs told The Australian they were concerned with the lack of economic policy released by the Opposition Leader, while also voicing dismay of an apparent retreat by the opposition frontbench on offering tax cuts and bold industrial relations reform ahead of the election.

The Coalition analysis on bracket creep, based on data from the Parliamentary Budget Office and the Australian Taxation Office, shows the average worker in the seats Mr Taylor is campaigning in this week face higher taxes despite the implementation of stage three.

It claims the average worker in the Melbourne seat of Aston – a seat Labor won at a by-election but is widely expected to be won back by the Liberals – is paying $5009 more tax under the Albanese government, with this to rise to $12,739 if there are no tax cuts delivered by 2028-29. The average worker in the inner-Melbourne seat of Goldstein, where the Liberals are trying to oust teal MP Zoe Daniel, is ­already paying $3805 more tax with this to rise to $9692 by 2028-29.

Workers in the western Sydney seats of Parramatta and Werriwa are paying an average of $4000 more tax since before the 2022 election, while those in northern Sydney’s Bradfield are paying nearly $7000 more.

Workers in the Tasmanian seats of Bass and Lyons are paying more than $3000 in higher taxes under the Albanese government, with this to rise to more than $8000 in both seats by 2028-29.

A report by Deloitte Access Economics to be released on Monday forecasts the revenue from income tax is forecast to underperform December’s expectations by $6bn over four years.

“While that does represent a hit to the bottom line, it will still see taxes on individuals continuing to climb as a share of the economy,” the report says. “That’s a reminder of the budget’s ongoing (and increasing) reliance on ­personal income tax over time.”

The report adds: “(The) habit of relying on bracket creepto fix political problems is not a healthy one. The federal budget has a built-in mechanism to stealthily raise taxes on individuals without requiring politicians to announce any tax hikes. Indeed, it is much more politically palatable to let bracket creep quietly erode the living standards of a large group of taxpayers than it is to announce the painful winding back of a temporary handout that will leave a smaller group of individuals worse off. As is often the case, good politics does not mean good policy.”