Treasurer Jim Chalmers has stood firm behind his contentious stage 3 tax cuts after it was revealed on Tuesday the cost would blow out to $69bn over the next four years.
While not contained within the budget papers, the government has revealed that over the decade, the final stage of the former Morrison government’s tax overhaul will cost the budget close to $300bn.
The tax overhaul changes the threshold for marginal tax rate for everyone earning between $45,000 and $200,000. Wealthy Australians earning more than $200,000 will get a yearly tax break of up to $9000 from next year.
The total cost to the budget is five times the $14.6bn cost-of-living package that Dr Chalmers announced in the budget.
Greens leader Adam Bandt said that package would leave Australians behind and forging ahead with the tax cuts was a “betrayal” of everyday Australians doing it tough.
Treasurer Jim Chalmers handed down his second budget in a year on Tuesday. Picture: NCA NewsWire/ Dylan Robinson
“A big reason that Labor refused to lift people out of poverty is that they are committed to stage 3 tax cuts for the wealthy while everyday people get next to nothing,” he told ABC News.
“For a government that says it is concerned about debt and sensible spending, they can still find a quarter of a trillion dollars to give tax cuts to Clive Palmer and Gina Rinehart.
“If the budget situation is what the government says, they have to ditch the stage 3 tax cuts and put that money into cost of living relief for everyday people.”
Dr Chalmers said the government was committed to rolling out the tax cuts next year that would benefit everyone earning more than $45,000 a year.
“We haven’t changed our position … they haven’t actually been a focus of the deliberations for this budget at all,” he told ABC News.
He said they were designed to counter budget creep.
Pressed about it on ABC Radio, Anthony Albanese also maintained the government “had not changed its position”.
The Prime Minister told Channel 7 the government had given “no consideration” to stage 3 in its budget deliberations.
“What we focused on last night was some measures that we announced in our budget. We’ve not changed our position on that,” he said.
Opposition Leader Peter Dutton said he believed the tax cuts would “come in at the right time”, and the government could not “break their promise”.
“The Prime Minister is not going to add this one to the list (of broken promises),” he told ABC News.
“I think they come in at the right time”
‘Not even a loaf of bread’
The $14.6bn cost of living package comprises a $3.5bn investment to help 11.6 million Australians see a doctor and a $1.5bn package to support 5.5 million Australians pay their electricity bill.
Welfare payments will increase as part of the package, including a $40-a-fortnight rise for JobSeekers under 55, a $92.10 fortnightly boost for those older Australians, and an increase in base payments for people on Austudy and Youth Allowance. Sole parents will be $380 a month better off following changes to single parenting payments.
Mr Bandt said the JobSeeker increase, which equates to about $2.80 a day for younger people, was “not enough to buy a loaf of bread”.
“Labor has betrayed renters, job seekers, and everyone who is doing it tough,” Mr Bandt told ABC News.
Dr Chalmers said the measures reflected the government’s effort to “support the most vulnerable people”.
Mr Albanese said $40 a fortnight would “make a difference to people” and take pressure off.
“We’re dealing with a global economic challenge of inflation, so what we did was to provide support to take pressure off people, as well as always being conscious,” he told ABC Radio.
“There’s just no good doing that whilst adding pressure to inflation, which is why we haven’t done that.”
Greens leader Adam Bandt has hit out at the stage 3 tax cuts. Picture: NCA NewsWire / Martin Ollman
Mr Bandt said Labor’s second budget “leaves millions of people behind”.
Dr Chalmers’ package also included a $15-a-week increase to rent assistance, which Mr Bandt said showed the government didn’t understand the severe rental crisis plaguing the country.
“Five and a half million renters get absolutely nothing out of this budget. Those lucky to get rent assistance might get a dollar or two a day,” Mr Bandt said.
“Rents in capital cities have been growing 10 times faster than that. Labor doesn’t understand how severe the rental and housing crisis is.
“Helping people deal with the cost of living crisis is a bare necessity.”
Dr Chalmers said he understood, and respected, there were people who would say the government should do more.
“We’ve tried to do as much as we can without blowing the budget and adding substantially to inflationary pressures in the economy,” he told ABC News.