No changes to stage three tax cuts official, says Jim Chalmers

Jim Chalmers has ruled out changes to the legislated stage three tax cuts in the October budget.

Jim Chalmers in Washington for a meeting of G20 finance ministers.

Jim Chalmers has ruled out changes to the legislated stage three tax cuts in the October budget, as he told G20 finance ministers in Washington that “respon­sible budgets” are “the best buffer right now” against a sharp global slowdown.

Following weeks of fevered speculation stoked by obfuscation from the Albanese government about whether it planned to break a key election promise, the Treasurer gave a definitive “no” when asked whether the upcoming budget would scrap or wind back tax relief for middle and higher income households.

“The stage three tax cuts are around three budgets away and they’re currently legislated,” he said ahead of meetings with counterparts in the American capital.

“We’ve got more pressing priorities in the interim.”

Deputy Opposition Leader Sussan Ley on Thursday accused the Treasurer of using “weasel words”, calling for the government to “guarantee” the changes would go ahead.

Ms Ley said the Albanese government’s rhetoric “absolutely suggest that they’re only off the table for now, and there’s an opportunity for them to come back in the budget next year. Millions of Australians are expecting those tax cuts, millions of Australians are owed those tax cuts, and millions of Australians have been promised them,” she said.

Dr Chalmers carried to the American capital his dire warnings about the likelihood of a US recession – a prospect US President Joe Biden sought to downplay in the previous 24 hours.

“I think there’s a pretty broad expectation around the world that there’s a big risk of recession here in the US, as there is in the UK and Europe, and China’s growth has obviously slowed as well,” Dr Chalmers said.

“The risk here is a hard landing brought about by the blunt and brutal application of tighter monetary policy, and that is a central part of the conversation I will be having with my colleagues from around the world.”

Dr Chalmers said “skyrocketing inflation” had “necessitated a blunt and brutal reaction from central banks” while higher global interest rates “risk a hard landing in a number of economies around the world”.

“What happens here in the US has consequences for us as well.

“This is the backdrop of the first Albanese budget which I will hand down in less than two weeks’ time. The best way to build buffers against this global turbulence is a responsible budget. The budget will be all about building our defences against this global economic turbulence,” he said.

Opposition Treasury spokesman Angus Taylor said it was hypocritical for Dr Chalmers to raise the alarm about aggressive US rate hikes after claiming in the run-up to the election that “Australians couldn’t give a stuff what inflation is in the US”.

“Six months ago, the Treasurer was saying Australians couldn’t give a stuff about what’s happening overseas,” Mr Taylor said.

“Now, as he prepares to hand down his first budget, he’s running around Washington with a new-found interest in the economies of other countries.

“This is complete hypocrisy from an inexperienced Treasurer,” he said.

“All we’ve heard from the Treasurer is doom and gloom forecasting and commentary but no plan on how to deal with it.”

Dr Chalmers was due to meet with the US Federal Reserve chairman Jerome Powell, as well as economic ministers from the US, Britain, Canada and South Korea and the heads of the International Monetary Fund and World Bank.