“There are pressures of cost of living that have, according to Treasury analysis and according to common sense, most impacted low- and middle-income earners,” he said.
“Since 2019, there has been a pandemic, there has been a recession, there has been global inflation. There has been not one war, but two wars, that have had an impact.
“But I’ll be very clear in accepting responsibility for policies put forward by my government.
“No matter what the policies have been, I have accepted responsibility. That’s my job.”
The full federal ministry meets on Wednesday for a second day of talks about government strategy before caucus meets at 4pm to hear the tax proposal, ahead of an announcement on Thursday including the release of Treasury advice that is said to show the economic benefit of increasing tax cuts for middle-income workers.
Economists been calling for adjustments to the stage 3 tax cuts.
Cassandra Winzar, chief economist for the Committee for Economic Development of Australia, said if the overall cost of the tax cut package was staying the same and more of the benefits were being redirected towards lower income earners that was a positive development.
Winzar noted economists have been calling for some time for the government to keep the 37 per cent tax bracket, and that would be a simple change.
“It doesn’t make sense to not give quite as big as a cut to that top tax bracket as was previously going to be the case,” she said.
The Grattan Institute’s economic policy director Brendan Coates said if the 37 per cent tax bracket was kept near the existing $120,000 threshold or slightly higher, it would give the government about $8 billion back.
Coates said the simplest way to use that $8 billion to provide greater tax cuts to lower-income earners would be introducing a tax offset, similar to the low and middle-income tax offset which ended in June 2022.
“A tax offset means that the extra tax cuts you’re offering to middle-income earners don’t flow through to high-income earners as well,” he said.
Winzar said shifting who benefits most from the tax cuts would not change the package’s impact on inflation, but the overall package will cause an increase in spending which could add pressure on the Reserve Bank to lift interest rates further.
“We’ll be having the federal government going in one way, giving more money to households, the Reserve Bank going the other way with interest rates and taking money out of households,” she said.
With new details of the plan emerging, shadow treasurer Angus Taylor intensified the attack on Albanese and Treasurer Jim Chalmers by saying they had lied to voters when they said the stage 3 tax cuts would not change.
“They said they were committed to them, they said they were going to stick to them, and over 100 times they lied to the Australian people,” Taylor said on Wednesday morning.
“They’ve been to two elections – two elections – and, of course, both the treasurer and the prime minister voted for [the tax cuts].
“So if there was ever, ever a breach of promises, the mother of all broken promises, this is it. It is an egregious betrayal of trust with the Australian people.”
Albanese said he was not in government to “occupy the space” but wanted to make a difference to individuals and the nation.
“But I’ll tell you what my job is. too. My job isn’t to say, ‘I’ll just wring my hands about cost-of-living pressure that people are feeling.’
“My job is to respond, to seek advice, and then to make a difference – to make the right decision, not the easy decision.
“And the policy that I will be taking to the party room this afternoon is aimed squarely at middle Australia but it’s also aimed at good economic policy.
“My job is to do the right thing for the right reasons. That’s what I will do.”
Cut through the noise of federal politics with news, views and expert analysis from Jacqueline Maley. Subscribers can sign up to our weekly Inside Politics newsletter here.
Denial of responsibility! galaxyconcerns is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.