Teal MPs and Senate crossbenchers say Anthony Albanese should redesign or dump stage-three tax cuts

Teal MPs who campaigned on bringing integrity to politics have urged Anthony Albanese to break his election commitment on stage three tax cuts.

Teal MPs Kate Chaney and Monique Ryan, pictured right, say Anthony Albanese should redesign the stage three tax cuts to benefit more Australians. Picture: NCA NewsWire / Martin Ollman

Teal MPs and Senate crossbenchers who campaigned on bringing integrity to politics have urged Anthony Albanese to break his election commitment and redesign or scrap entirely the Morrison-era stage three tax cuts.

Labor would have enough support in the Senate to overhaul the package, which the Parliamentary Budget Office estimates is worth $323.6bn over a decade, with the Greens, Jacqui Lambie Network, David Pocock and Lidia Thorpe saying they should benefit low-­income earners more.

Without the support of the ­Coalition, the government must gain the backing of the Greens and at least two crossbenchers to push bills through the Senate.

Independent MP Allegra Spender, whose electorate of Wentworth is the wealthiest in the country, and the member for Mackellar, independent MP Sophie Scamps, said the government should honour its election commitment to the stage three tax cuts. Dr Scamps was not against “fine tuning” the package if there was good reason to do so.

Teal MP Monique Ryan called on Labor to retain the 37 per cent tax rate for Australians earning ­between $120,001 and $180,000.

The government should redirect savings to build 100,000 homes and expand Commonwealth Rental Assistance to help those most-in-need, she said.

“The stage three tax cuts should be modified so they benefit more Australians,” Dr Ryan said.

“My community has been clear with me: if the government is going to add to inflation with tens of billions of dollars in tax cuts, it should do so in a fairer way.”

Teal MP Kate Chaney called on Labor to reshape the tax cuts and use savings to create cost-of-living relief for Australians struggling under soaring inflation, while indexing tax brackets to address bracket creep.

Fellow teal Zoe Daniel appeared open to changes to the stage three tax cuts but was surveying her constituents on their views. She urged the government to increase the tax-free threshold to help low and middle-income Australians.

ACT independent Senator Pocock said the stage three changes should be redesigned to support Australians “at the lower end”, and was open to increasing the tax-free threshold.

“If the government won’t look at redesigning the cuts, then leaving the high-income tax bracket at $180,000 is an improvement,” Senator Pocock said.

Senator Thorpe, who defected from the Greens to become an independent Victorian senator, said people on $180,000-plus didn’t need a tax break. She wanted the tax-free threshold to be lifted from $18,200 to at least $20,000 in the midst of the cost-of-living crisis.

“Labor likes to say they look after the battlers and the working class, but these tax cuts show that’s just not true. It’s a massively unfair package that should be scrapped,” Senator Thorpe said.

One Nation leader Pauline Hanson was vehemently opposed to any changes to stage three, saying they must be passed on in full. She rejected the need to lift the tax-free threshold and said the top tax rate of 45 per cent should kick in at $200,000, up from $180,000. “Everyone has to contribute. The Prime Minister needs to assert authority over his socialist left faction and be unequivocal in stating these tax cuts will be passed on in full on July 1. I was promised tax cuts, and the government must ­deliver,” Senator Hanson said.

United Australia Party senator Ralph Babet said the only change to stage three should be a further reduction in taxes paid by all Australians, warning the package didn’t go far enough.

“The stage three tax cuts are just the beginning. Our people are overtaxed because our government is wasteful and overspends,” he said.