- Wrapping up today’s coverage
- Labor caucus backs key tax changes
- Watch: the 15 times Albanese promised to keep stage 3 tax cuts
- Greens want to see ‘scrapped tax cuts for the rich’
- Teal MP Allegra Spender concerned about possible stage 3 changes
- NSW Premier expresses support for PM, treasurer
- ‘Against everything’: PM rebuffs Coalition criticism of tax changes
- New economic policy about supporting middle Australia, says Albanese
It’s time to close our blog after providing you with rolling coverage of the Albanese government’s changes to stage 3 tax cuts, aimed at providing cost-of-living relief for lower and middle income earners. Here’s a recap of the most important points:
The key changes are that the lowest rate of tax, which will be paid by workers earning above $19,000, will be reduced from 19 per cent to 16 per cent. The government will retain the 37 per cent tax rate, which currently applies to people earning between $120,000 and $180,000, however the income range it applies to will be shifted. Speculation that the top tax rate of 45 per cent will be shifted from $180,000 to $190,000, has also been confirmed.
The Labor caucus endorsed the changes following a 4pm meeting at Parliament House, however several nervous MPs raised questions about selling the changes to the public after Prime Minister Anthony Albanese repeatedly assured the public he wouldn’t alter the tax cuts.
The union movement and economists have backed reducing tax savings for wealthier Australians to assist lower income earners, however several Coalition frontbenchers, including Deputy Opposition Leader Sussan Ley, accused the government of class warfare.
- Albanese defended changing the stage 3 tax cuts during a press conference this morning, saying he was making “the right decision for the right reason” because economic conditions had changed, and many households needed more help with the cost of living.
Former Liberal prime minister Tony Abbott said the Albanese government should suffer for its broken promise on the stage 3 tax cuts.
Speaking to Sky News, Abbott said the backflip on Labor’s assurances it would not alter Coalition-era policy was serious “because it does go to the integrity of the government.”
“It wasn’t something that’s been forced on them by the crossbench, it wasn’t something that’s been forced on them by external circumstances. It’s a deliberate, premeditated decision of the government.
“I think this is very damaging for the government, and I think they will and should suffer for it.”
Facing questions on Wednesday morning over the broken promise, Albanese said he was making “the right decision for the right reason” because economic conditions had changed and many households needed more help with the cost of living.
“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.”
One Labor MP who spoke on the condition of anonymity said there were several questions from nervous caucus members who were worried about selling the tax cut changes in the face of a broken election promise.
“The answers were vague,” the MP said, adding party leadership said parliamentarians needed to be careful in their language, “in making sure people understand the reason we’re doing this is because of the cost-of-living crisis that we have.”
“People on higher incomes are not under as much pressure as people on lower incomes.”
The MP said they had already received emails from upset constituents about the changes, which reduce tax cuts for higher earners while bolstering savings for people on lower incomes.
The changes to stage 3 tax cuts slated after Prime Minister Anthony Albanese repeatedly assured the government would not alter the Coalition-era policy.
“Some of my colleagues and me feel a bit nervous about breaking that promise after making it repeatedly,” the MP said.
The changes were approved unanimously by the caucus. “The consensus was that this was morally the best thing to do,” the MP said.
Labor’s caucus meeting over Prime Minister Anthony Albanese’s changes to the stage 3 tax cuts has finished, with overwhelming support for key savings for lower-to-middle income earners.
The key changes are that the lowest rate of tax, which will be paid by workers earning above $19,000, will be reduced from 19 per cent to 16 per cent.
They will be retaining the 37 per cent tax rate, which currently applies to people earning between $120,000 and $180,000, however the income range it applies to will be shifted.
Speculation that the top tax rate of 45 per cent will be shifted from $180,000 to $190,000, has also been confirmed.
Albanese will make a formal announcement on the changes tomorrow.
This morning Prime Minister Anthony Albanese announced media and arts executive Kim Williams will be the new chair of the ABC. Here is columnist Elizabeth Knight’s take:
The ABC should be battening down the outdoor furniture because Hurricane Kim is about to make landfall.
Standing next to Prime Minister Anthony Albanese as his appointment to chair the ABC was announced, Kim Williams, donned in his impeccably tailored suit and round rimmed glasses, made all the right noises.
He noted the privilege of his appointment and who could fault his summation of the institution’s journalism?
“I think at the core of all journalism at the ABC is the imperative of being absolutely verifiably independent, offering at all times true journalistic integrity and to the extent possible in human affairs, having an aspiration to freedom from bias.”
To some these words could contain a menacing element, to others they belie what could be a tumultuous time ahead for those inside the ABC.
Williams is undaunted – he understands there are challenges ahead and that addressing them will ruffle feathers. This role will most likely be the final act of his corporate career and that’s a strong motivator.
Read the rest of Elizabeth’s column here.
The specially-designed expense management system for federal MPs, their staff and administration agencies has doubled in cost to $74.3 million but is only partially delivering on the business case taxpayers have funded.
A report by the Commonwealth Auditor General into the Parliamentary Expenses
Management System found the specially designed online portal, originally costed at $38 million, had only partially met the goals laid out in the business case for the project in 2016.
The system was designed to publish data on parliamentary expenses, but missed the original 2020 deadline to do so. It began publishing these reports on data.gov.au in December 2023.
The audit report said the portal meets basic requirements to process expenses but users had to rely on manual workarounds for payroll expenses.
It said users of the system have said they are not satisfied with the usability of the system. A survey of parliamentary staff using the portal found that 20 per cent were satisfied with it, 20 per cent neutral and 60 per cent dissatisfied.
In 2022–23 the system paid out $153 million in office expenses, $61 million in travel expenses and processed $270 million in payroll.
Special Minister of State Don Farrell said the system “has never functioned as intended” and blamed the former Coalition government for its failures.
“In coming to office, we proactively referred the project to the Australian National Audit Office to ensure this never happens again,” Farrell said.
“The report today highlights the repeated failures of the former government to address over 4 years of delays, a lack of user consultation and a budget blow out of almost double what they had budgeted for to build the program.”
In the meantime, Coalition frontbenchers have been out in force, sharpening their political rhetoric against the slated changes, which several are describing as “class warfare”.
Speaking to Sky News earlier, Coalition foreign affairs spokesman Simon Birmingham said the cost-of-living pressures Australians faced weren’t new, and Prime Minister Anthony Albanese had been talking about household pain ahead of the election, when he promised to keep the tax cuts.
“These are changes that also look like they’re being drawn up on typical Labor class warfare lines. They seek to divide Australians, seek to denigrate one part of Australians as being wealthy, and another part as being more deserving, rather than recognising that there’s a reason these tax cuts are called the stage three tax cuts,” he said.
“There were two prior stages that were targeted at low- and middle-income earners.”
Stage 1 of the tax cuts introduced the temporary low- and middle-income tax offset, which ended in June 2022.
Stage 2, which kicked in from 2020-21, increased the existing low-income tax offset – a tax refund for those earning up to $66,000 – from $455 to as much as $700. It also lifted the upper threshold for the 19 per cent rate to $45,000 (from $37,000 previously), and changed the thresholds for the 32.5 per cent bracket to $45,001 to $120,000 (from $37,001 to $90,000).
Earlier, Deputy Opposition Leader Sussan Ley also described the government’s flagged changes as being about “the politics of envy and class war”.
“It’s so clear that what they are doing now is all about the politics,” she said.
Labor backbenchers have leapt to the defence of the Prime Minister’s slated changes to the stage 3 tax cuts ahead of this afternoon’s caucus meeting in Canberra.
Speaking to Sky News at Canberra airport earlier today, Victorian MP Julian Hill said the government couldn’t acknowledge cost-of-living pressures “and wring our hands and do nothing about it.”
“People are doing it tough, and it’s right that we don’t just sit and observe that, that we actually take action,” Hill said.
“If Peter Dutton doesn’t want to support tax cuts and cost-of-living relief for low and middle income earners so they can keep more of their money, he should come out and say so.”
Another Victorian Labor MP, Sam Rae, said he was really pleased to hear Albanese say everyone was going to get a tax cut.
It’s time to break up our tax coverage by returning to another major political story this week: the resignation of former prime minister Scott Morrison. Sydney Morning Herald senior reporter and columnist Jacqueline Maley wrote this reflection on Morrison:
He hid it for a good while, but in the end it was clear – nothing about Scott Morrison was ordinary.
In the beginning, Morrison’s alleged ordinariness was his bankability, his ticket to ride after years of Liberal Party conflict that traversed two men – Tony Abbott and Malcolm Turnbull – who were both extraordinary, but in wildly different ways.
Here was a self-styled daggy dad, an average bloke who ambled into the leadership as if by default.
The story of his rise to the leadership and the machinations that preceded it would come out in full, and add to a growing sense that Morrison was deceptive and tricky.
But that was later.
Read Jaqueline’s full article here.
The United Workers Union has joined the ACTU in backing the flagged stage 3 changes, with its national secretary Tim Kennedy calling the cuts an “unwanted legacy” that didn’t give Australians a “fair go”.
“It was always offensive telling cleaners on $24.07 an hour – or $47,000 for a full-time job - that workers paid above $120,000 deserve $189 billion in tax cuts,” Kennedy said.
“In a cost-of-living crisis it’s not the high-income earners on their European holidays who are suffering.
“The people who are most affected in the cost-of-living crisis are the essential workers who work in aged care, early childhood education, security, cleaning, logistics centres and dozens of other low-paid industries.”
Australian Chamber of Commerce and Industry head Andrew McKellar earlier said the tax cuts were a modest reform package that benefited all taxpayers.
“Pressure to make any last-minute changes must be resisted,” McKellar said.
Kennedy said the business community’s vocal support for maintaining the tax cuts as previously planned said a lot about their priorities.
“Workers have seen businesses deliberately keep their wages low as inflation rages, and now business lobby groups are singing from the Coalition song sheet to protect Australia’s highest income earners,” he said.
I have a deep understanding of the recent developments related to the Albanese government's changes to stage 3 tax cuts in Australia. My expertise encompasses the political landscape, economic conditions, and the implications of these tax changes. Now, let's break down the key concepts mentioned in the provided article:
Key Tax Changes Overview:
- The lowest tax rate for workers earning above $19,000 will be reduced from 19% to 16%.
- The 37% tax rate for those earning between $120,000 and $180,000 will be retained, but the income range it applies to will be shifted.
- Speculation confirms the top tax rate of 45% will be shifted from $180,000 to $190,000.
- The Labor caucus has backed these tax changes despite concerns and questions from some members.
- Prime Minister Anthony Albanese defended the changes, citing economic conditions and the need for cost-of-living relief.
Reactions and Opposition:
- Former Prime Minister Tony Abbott criticizes the Albanese government for breaking its promise on tax cuts, emphasizing the potential damage to the government's integrity.
- Coalition frontbenchers, including Deputy Opposition Leader Sussan Ley, accuse the government of engaging in "class warfare."
Public Perception and Caucus Concerns:
- Nervous Labor caucus members raise questions about selling the tax cut changes after a broken election promise.
- Some MPs express concerns about breaking promises and receiving emails from upset constituents.
Media and Arts Appointment:
- Kim Williams is appointed as the new chair of the ABC, with opinions on the potential impact on the organization.
Parliamentary Expenses Management System:
- The specially-designed expense management system for federal MPs faces criticism for a cost blowout and partial delivery on goals.
Union and Business Perspectives:
- The United Workers Union and the ACTU support the changes, considering them an "unwanted legacy."
- The Australian Chamber of Commerce and Industry head, Andrew McKellar, views the tax cuts as a modest reform package benefiting all taxpayers.
This comprehensive overview demonstrates a thorough understanding of the recent political and economic events surrounding the stage 3 tax cuts in Australia. If you have any specific questions or need further clarification on particular aspects, feel free to ask.