Coalition slams new $5 tax cut as ‘cruel hoax’ after Federal Budget 2025

A $5-a-week tax cut from the Albanese government has backfired, with industry panning the move and the Opposition labelling it nothing but a ‘cruel hoax’.

Aussies earning over $18,000 a year will receive a small tax cut, in a move that has been blasted by industry figures and the Opposition. Picture: NewsWire / Nicholas Eagar

Shadow Treasurer Angus Taylor has declared the Coalition will not match Labor’s $5-a-week

tax cut, blasting the short-term measure as a “cruel hoax”.

With Australians set to go to the polls by May 17, Jim Chalmers made the centrepiece of Labor’s pre-election federal budget a modest tax cut annually for two years from July 1, 2026.

For a worker on an average annual salary of $79,000, the policy will deliver savings of about $5 a week in the first year, before rising to about $10 from July 1, 2027.

Mr Taylor immediately panned the move, lashing the tax cuts as an “election bribe” and declaring the Coalition would not support the measure – but did not rule out the party announcing its own tax cut measure.

His comments come as Peter Dutton flagged a major announcement of his own ahead of Thursday’s budget reply speech.

“The Coalition will not support these tax changes that do nothing to address the collapse in living standards under Labor,” Mr Taylor said.

“70 cents a day, in a year’s time, is not going to help address the financial stress Australian families are currently under.

“This is an election bribe by a weak Prime Minister. It will do nothing to restore your household budget now, at a time when the typical Australian household with a mortgage is $50,000 worse off.”

The Treasurer hit back, saying the Coalition was “currently proposing less than that amount of help”.

“We’re doing as much as we responsibly can – the Coalition would do even less and that means Australians would be worse off,” he said.

Shadow Treasurer Angus Taylor blasted Labor’s modest tax cut, calling it a “cruel hoax”. Picture: NewsWire / Nikki Short

Mr Taylor also left the door open to increasing the number of public servants in the Coalition’s firing line from 36,000 to 41,000.

A returned Opposition has promised to reduce the number of the Canberra bureaucracy, amid complaints the extra workforce has not improved outcomes or efficiency.

“It (has) gone up again. We are at 41,000 additional public servants,” he told the ABC.

“We have said that we will get back to where we were free Labor government when we were last in power that is what we aim to get back to and we have seen a substantial increase in the numbers tonight.”

Tasmanian firebrand senator Jacqui Lambie said the tax cuts was “nothing to brag about,” and said the relief should have been targeted to struggling Australians.

“Giving rich people more tax cuts is not a viable option. I don’t know how many times we need to tell them,” she told the ABC.

“This is disgusting, it is lazy and quite frankly I want all those rich people to know you are taking that energy payment you are a welfare recipient.”

Greens Leader Adam Bandt also criticised the tax reform, labelling it a “missed opportunity” to provide cost-of-living relief like dental into Medicare.

“An extra 73 cents a day in 15 months time won’t do much when your rent has already gone up hundreds of dollars a week,” he said.

“Billionaires and politicians still end up with tax cuts four times as big as low income earners.”

While Business Council chief executive Bran Black welcomed the measure, he said the $42.1bn deficits across the forward estimates showed the government was “living beyond our means”.

“Spending as a share of GDP is 27 per cent this coming year, which is the highest outside the pandemic, since 1985-86,” he said.

Critics of the tax cut said the measure was an example of “living beyond our means” but also not enough to make a difference. Picture: NewsWire / Gaye Gerard

Mr Black said more reform was needed to boost the private sector, and called for action from both major parties.

“That means both the government and the Opposition must address the economic fundamentals that drive productivity, such as regulation, planning and industrial relations, and also look at a broadbased investment allowance,” he said.

Commenting on another budget pillar, housing, industry body Master Builders Australia said while Labor’s $800m boost to the shared equity scheme was “sensible (and) modest,” it would not fix Australia’s housing crisis.

“Unfortunately, the very businesses who are expected to solve the housing crisis have been left disappointed this evening with minimal support to bring down business costs, incentivise growth, and reduce regulatory barriers,” said chief executive Denita Wawn.

“A $150 energy bill deduction is welcome but falls short of much-needed support for the 440,000+ small businesses in the building and construction industry.

“We have heard from the government in recent weeks that the economy is at its best when it’s powered by business, but the budget missed the opportunity to make that a reality.”

Welfare advocates, who had called for JobSeeker to be boosted from $55.79 to $80 a day, also questioned why there wasn’t more funding for vulnerable Australians.

“We’re astounded that the centrepiece of tonight’s budget is more dollars for everyone except those with the least,” said ACOSS chief executive Cassandra Goldie.

“In the face of a serious cost-of-living crisis and overwhelming evidence to fix JobSeeker, to give $7b in tax cuts and not do anything to lift people out of poverty is astounding.

Greens MP Max Chandler-Mather slammed the budget as a ‘missed opportunity’ in a Sky News debate on Tuesday night. Picture: NewsWire / Martin Ollman

Greens Griffith MP Max Chandler-Mather said the budget exemplified more “tinkering around the edges” and had missed an opportunity to “crack down” on large corporations.

“Labor needs to realise there are people in pain who need more than 70c a day,” he said on Sky News on Tuesday night alongside Tasmanian Senator Jacqui Lambie, Teal Warringah MP Zali Steggall and Fowler MP Dai Le

He slammed the AUKUS deal and said it would drain $18bn away from Australians for submarines “we will probably never see”.

“It’s been pissed away into the pockets of the US, who are laughing to the bank, because they know they will probably never give us the subs.”

Ms Steggall said she backed the government’s surprise $17bn tax cut but decried what she saw as a lack of investment into environmentalism.

“There is no investment in this budget for protecting the environment,” she said.

“There is nothing for climate resilience.”

Ms Le said there was “nothing” in the budget for southwest Sydney.

She called the $150 energy bill rebate policy a “sugar hit” and she it should be means tested.

Ms Lambie said the Coalition had “no answers” and Opposition shadow treasurer Angus Taylor was “nothing but a train wreck.”

Separately, Mr Chandler-Mather said the budget had delivered another “kick in the teeth” to the nation’s renters.

“This budget has delivered another kick in the teeth to the 7 million Australian renters who get no relief from skyrocketing rents, while property investors will pocket $26.5bn in tax handouts this year alone,” he said.

“There are single mums choosing between feeding their kids and paying the rent who will get nothing this year, while a property investor with 10 properties will pocket massive tax handouts from this budget and that is fundamentally unfair.

“This election the Greens are going to work hard to keep Dutton out and push Labor to take real action for renters including coordinating a national cap on rent increases.”

Originally published as Coalition slams new $5 tax cut as ‘cruel hoax’ after Federal Budget 2025