Federal Government won’t budge on tax cuts

The Morrison Government has knocked back Labor's offer to negotiate on the tax cut package, saying that the Opposition has failed to learn ­lessons from its election thrashing.

Opposition Leader Anthony Albanese said Labor was willing to talk with the Government on passing its tax plan, but still refused to pass the third and final stage.

He also revealed Labor is talking with the crossbench in a bid to prevent them from backing the package without changes.

 

Joel Fitzgibbon.
Joel Fitzgibbon.

The stand-off could delay when people receive their tax cuts of up to $1080 this year.

ALP frontbencher Joel ­Fitzgibbon piled on the pressure by adding his voice to those calling on the Opposition Leader to quit stalling or risk worsening the economic slowdown.

"You can't deny punters a tax cut from Opposition, particularly so soon after an election where we had our backsides kicked," he said.

Senior Government ministers have said there will be no negotiations with Labor on the tax cuts, vowing that they should be passed in full, given the ­election result.

Yesterday, following a Shadow Cabinet meeting, Mr Albanese offered to negotiate on the tax plan. Labor's opening offer was to pass stage one of the plan (tax offsets of up to $1080 this year), and pass stage two (lifting tax thresholds for low and middle-income earners), if it and more infrastructure projects were brought forward to this year.

Mr Albanese said Labor was "staying firm" on opposing stage three (dropping the tax rate for people earning $45,000 to $200,000 from 32.5 cents to 30 cents in the dollar from 2024), saying a vote on it should be deferred.

"What we know right now is that the economy needs stimulus. We're looking for solutions, rather than arguments," Mr Albanese said, adding that Labor's proposal would cost the budget $3.7 billion and that he'd already begun conversations with the crossbench.

Finance Minister Mathias Cormann said the income tax relief would not be split up.

"Labor have still not learnt the lessons from the election," Senator Cormann said.

"Our plan prioritises low and middle-income earners, takes the bracket creep monkey off people's back, is economically necessary and fiscally responsible and, importantly, it is what Australians voted for."

Independent economist Clifford Bennett said the entire package must pass for the economy to be injected with a desperately needed boost of up to $10 billion.