Dutton hints Aussies could be in store for even bigger tax cut

Opposition leader Peter Dutton has hinted at a “significant” reveal in his budget reply that could involve even bigger tax cuts.

Jim Chalmers has accused the Coalition of “a brain explosion” after Liberal leader refused to back his $17 billion tax cut.

The Treasurer has slammed the Liberal Party for not backing in the tax cuts that will start at $5 a week from July, 2026 before rising to $10 a week the following year.

But it’s the modest nature of the initial tax relief that is coming under the microscope this morning as Mr Chalmers and the PM hit the campaign trail.

Despite costing $17 billion over the next five years, the tax cuts start at just $5 a week.

“So, barely enough for a coffee or about a McDonald’s Happy Meal. How much impact do you think $5 a week will have?,” Sunrise host Nat Barr asked this morning.

“Well, it’s more than that. There are two rounds of additional tax cuts and together with the tax cuts which are flowing now the average is about $50 a week, $10 additional in last night’s budget. That’s because we need to be responsible,” the Treasurer said.

“And we’re providing this cost-of-living relief in a modest but meaningful way, the most responsible way we can. It’s not the only cost-of-living relief in the budget. We’re strengthening Medicare, making medicines cheaper, giving energy rebates, cutting student debt. There are a whole range of ways we’re helping people. Tax cuts are an important part of that.”

Nat Barr and the treasurer.

But the Sunrise host then asked the Treasurer why the tax cut was effectively a flat tax rate that gave the rich and the poor the same relief.

This is because the tax relief is delivered to all through a reduction in the tax rate for all earnings between $18,200 and $45,000.

What that means is that everyone gets the same $268 tax cut next year if they earn over $45,000. It’s a little less generous for earnings between $18,200 and $45,000.

Casual workers earning under the tax-free threshold of $18,200 get no tax cut at all.

“But if you earn $1 million a year you still get this, don’t you?,’’ Barr asked. “Why didn’t you means test it?.”

“Because when you cut the bottom rate of taxes it flows through up and down the system but proportionately it applies to people who need it the most,’’ the Treasurer replied.

“The biggest proportionate impact is people on relatively modest incomes, young people, people entering the workforce for the first time and that’s deliberate.”

“The only simple and effective way to do that would be to provide it in people’s tax returns. That’s the only way you can limit it up the tax scale. We wanted to make sure this was a permanent ongoing benefit. What we’re doing is topping up the tax cuts which are already flowing to every Australian taxpayer to provide that cost-of-living relief.”

“It’s how we top up a tax cut for every taxpayer.”

The Treasurer then slammed the Coalition for not backing the change.

“The election will now be a pretty clear choice, you know, after Angus Taylor’s brain explosion last night on tax cuts, the election will be a choice between Labor cutting taxes and helping with the cost of living, versus Peter Dutton’s secret cuts which will make people worse off,” he said.

“Peter Dutton wants to cut everything except people’s taxes. That means people will be worse off if he wins. That will be a key issue in the election campaign itself.”

Speaking on Sky News, Mr Dutton said the $5 tax cut was a “cruel hoax” but left the door open to his own tax cuts.

Speaking on the Today show the PM defended the tax cuts as responsible.

“This is modest,’’ the Prime Minister said.

“And you correctly put the cost, which is there. It is something that we can afford. It builds on importantly, the tax cuts that we introduced that began this financial year.

“Importantly, where we intervene to change the tax cuts so that every Australian got a tax cut, not just you and me and not just the Top End, which is what the former government had in place.

“Now this is a top up of that. So the average Australians will receive in excess of two and a half thousand dollars a year extra in their pockets at the same time as inflation is falling, real wages are increasing, interest rates have started to fall after

those things were all heading in the wrong direction.”

Dutton hints he will drop bigger tax cuts

Mr Dutton has dropped a big hint he will have more to say about tax cuts in his budget in reply speech on Thursday night.

He told ABC Breakfast this morning that voters will need to wait for the big reveal.

“Thursday night will be a big night because we’ll make a very significant announcement, and it will be about how we can help Australian families deal with Labor’s cost-of-living crisis,” Mr Dutton said.

“We want to make sure that we can properly defend our country and keep Australians safe, and address the crisis that exists at the moment across the economy in many ways.

“The government created this crisis: the crisis in housing, a crisis in energy, [a] cost-of-living crisis, and I want to make sure that we can detail our plan, which we’ll start to do on Thursday night, and then we’ll outline that progressively until election day.

“I believe that that is a plan that Australians will accept, and will support at the next election.”

The Opposition Treasury spokesman Angus Taylor said the federal budget fails to “restore hope” for Australians.

“We needed a budget which takes Australia back to the standard of living that we had when we were last in power,” Taylor said.

“Instead, what we get is an election bribe, 70c a day in over a year’s time. It simply doesn’t cut it in terms of giving us the economic pathway we need to restore hope … to restore our standard of living, and to re-establish budget integrity, which has been lost since Jim Chalmers threw out the rule book that Peter Costello put in place in the ’90s.”

Tax cut is ‘insane’

Mr Chalmers’ surprise $5-a-week tax cut has been slammed as “insane” and an insult by critics but it has set up a huge political fight with Mr Dutton.

The Liberal leader has made a big call on the new tax cuts that will cost the budget a whopping $17 billion in revenue foregone.

Describing the tax cuts as a “cruel hoax” the Liberals have revealed they won’t be supporting them.

But the Liberals are yet to reveal whether they plan to offer bigger and better tax cuts suggesting they will have more to say this week.

Speaking on Sky News, columnist Andrew Bolt, who is no fan of the Albanese Government, said the tax cuts were “insane”.

“I think the $5 buys them contempt,’’ Bolt said.

“$5? I mean the way prices are going that won’t buy you a cup of coffee – for your family. It’s insane.

“Labor has absolutely stuffed the electricity system. It is a fig leaf for Labor’s failure.”

The tax cut starts off at $5 a week in July, 2026 and rises to $10 a week the following year.

Sky News spoke to voters on the streets of Sydney on Tuesday night who suggested voter scepticism that it would change people’s vote.

An election battle looms over the $5 tax cut. Picture: NewsWire / Brenton Edwards

“In a word: no. No. No, it wouldn’t. And $5? No,” one woman said.

Another young couple said the $5 tax cut per week would do little to sway them at the upcoming election.

But another man said the $5 “probably” would sway their vote.

“Why not,” he said.

“Maybe everyone (is) happy and … Peter Dutton says ‘okay, I give you $6.’”

Opposition Treasury spokesman Angus Taylor told ABC 7.30 host Sarah Ferguson that the Liberals would not green light the tax cuts as outlined.

“This is a big-spending budget for the next five weeks, not for the next five years and what we see in it is a promise of 70 cents a day in a year’s time which will do nothing to restore Australians’ standard of living,’’ Mr Taylor said.

“There are better structural fundamental solutions to the cost-of-living crisis. That is not what is being offered by Labor, and so we won’t support what they’re doing here.”

Ferguson then interjected, “You do not support the tax cuts?”

“No. Look, let’s be clear: They are a cruel hoax,’’ Mr Taylor said.

“They are not a genuine tax cut. 70 cents a day, in a year’s time, when for a typical Australian family with a mortgage they are paying an extra $50,000 over around above what they expected.”

Australia Shadow Treasurer Angus Taylor said the Budget would “do nothing to restore Australians’ standard of living”. (Photo by Hilary Wardhaugh/Getty Images)

Speaking on 7.30, the Treasurer said if the Coalition had alternatives he should “come clean”.

“That’s the first we’ve heard. Sounds like they are not supporting our tax cuts.

“That’s what happened the last time we tried to give every taxpayer a tax cut, Peter Dutton said we should call an election.

“We’ve done this in a very responsible way. We are providing tax relief to every Australian taxpayer. If he doesn’t support that, he should say so.

“Angus Taylor’s colleagues don’t take him seriously. It is an absolute bin fire of inconsistency.

Independent Senator Jacqui Lambie. Picture: NewsWire / Martin Ollman

Lead fart claims

Earlier, Tasmanian independent Jacqui Lambie described the Liberal frontbencher Angus Taylor as “a trainwreck”.

“Quite frankly Angus Taylor has been nothing but a trainwreck, even his own party’s saying that,” she told Sky News.

“They have no plan of attack, we haven’t heard anything. The biggest thing we’ve heard out of them has been nuclear energy which went down faster than a lead fart.

“There is no plan, I don’t know what Peter Dutton is going to pull out on Thursday night but there is no plan, this is like an opposition in chaos.”

Mr Dutton will outline his formal response to the budget on Thursday night with the Prime Minister tipped to call the election as soon as this weekend.

Originally published as Dutton hints Aussies could be in store for even bigger tax cut