The prime minister has defended changes to the stage 3 tax cuts, saying the government made its decision to overhaul the system as a way to ease cost of living pressures on Australians.
In a speech to the National Press Club on Thursday afternoon, Anthony Albanese said on July 1 the government will deliver a "tax cut for every Australian taxpayer" — just not the tax cuts the country was expecting.
"All 13.6 million taxpayers, not just some," the prime minister told the Press Club. "Everyone who works and pays tax will benefit.
"This is a significant boost for the take-home pay of Australians on modest incomes and people working part-time.
"And it will look after low-income earners and part-time workers as well.
"So, someone working at Australia's largest employer Woolworths earning $40,000, will now get a tax cut of over $650.
"Under Scott Morrison's plan, they would have got nothing."
All resident taxpayers with a taxable income under $146,486 will get a larger tax cut under the government's reforms.
The prime minister reassured the country that the tax cut changes would not feed inflation, something Treasurer Jim Chalmers has himself saidmultiple times over the last 24 hours.
"The Treasury secretary – and the Treasurer – have both consulted the governor of the Reserve Bank on our changes, who expects that there are no implications for their inflation forecasts," he said.
Mr Albanese spoke of the multiple global crises that have made the original planned cuts no longer feasible for his government to implement, stating, "This is the right decision, not the easy decision'".
"We've had to deal with a global pandemic, a recession, damaged supply chains, conflict in Europe and the Middle East, rapid increases in the price of food and energy and ongoing worldwide economic uncertainty," he said.
"And if we were to simply proceed with the old plan – promoted before any of these challenges even existed – it would mean middle Australia missing out on the help they need and they deserve.
"And it would mean leaving out millions of women, part-time workers, young people and renters, who more than ever deserve a government that's on their side."
The prime minister also announced that low-income earners will get additional tax relief of up to $172 under changes to the Medicare levy.
Opposition walks back
Deputy Liberal leader Sussan Ley walked back comments that appeared to say the Coalition would propose to unwind the government's changes should it win office at the next election.
Ms Ley originally said:"There's no way in the world … that we are going to back-in higher taxes and an attack on aspirational Australians and a prime minister who's lied to the Australian people."
She softened her language and said she had been misrepresented by the Labor Party: "Our position is that the stage 3 tax cuts should be implemented as designed and endorsed by the Australian people. That was Anthony Albanese's position."
When asked if her party would roll back any of the changes, she said: "We will assess any proposal that comes out today."
The prime minister took aim at the Coalition and the deputy leader in his address for rejecting the changes before they had even been formally announced.
"They don't know what it looks like. They don't care who it will help. The only thing they are in interested in, is having a fight," he said.
"They are so addicted to saying no, that they have already promised to reverse these tax cuts — and increase taxes on 11.5 million hard-working Australians if they win the next election."
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Leader of the opposition Peter Dutton said there were "more questions than answers" of the prime minister after his speech, adding that he had "misled" Australians.
"I think you've got to look past the rhetoric and the lies and the reality of people's lives. $15 a week is not going to cut it for families who continue to pay more and more for their energy bills under Labor," he said.
"That's not going to cut it when you are paying $15,000 or $25,000 more in your mortgage payments under this government."
Mr Dutton challenged the prime minister to call an election: "He should call an election and put the changed position to the Australian people and let them be the judge of his character, whether he's fit to be prime minister of this country, and whether they could ever trust him again".
Tax cut changes still need to pass parliament
While the government doesn't need the Coalition to pass the changes the caveat it will still need the support of the Greens and some of the crossbench.
Greens leader Adam Bandt said the party will use its leverage as the government tries to pass the new cuts, arguing even more needs to be done for low- and middle-income earners.
Mr Bandt said the changes were not enough and any tax break for those on higher incomes was hard to justify.
"As this now works its way through the parliament, we'll be asking is this really the best Labor can do for low- and middle-income earners in the middle of Labor's housing and rental crisis," he said Thursday afternoon.
When asked if the changes would pass parliament, as is, the prime minister said that it was "the best proposal" that was "backed by the treasury".
"We think this is the right thing to do and as I said, we have changed our view on income tax and we are explaining our reasons why," he told the Press Club.
"It won't be inflationary, it will make a difference for Australians overwhelmingly, everyone will get a tax cut."
On the actual prospect of the revised changes passing he said:"We will argue our case, that's all I'm doing here today and I'm confident that we will be able to get it carried in the House of Representatives and the Senate."
ACCC inquiry into supermarkets
Mr Albanese, in keeping with the addresses theme of tackling cost of living pressures for all Australians, announced another inquiry into the supermarket industry.
The treasurer will direct the ACCC to conduct a 12-month price inquiry into Australian supermarkets.
"The ACCC has significant powers – and it is the best and most effective body to investigate supermarket prices.
"To examine the difference between the price paid at the farm gate – and the prices people pay at the check-out.
"For me, it's this simple.
"When farmers are selling their product for less, supermarkets should charge Australians less."
Woolworths Group CEO Brad Banducci said he welcomed the "opportunity to assist the ACCC with its inquiry".
"We know many Australian families are doing it tough and looking for relief at the checkout," he said in a statement.
"Food inflation has continued to moderate in recent months and we expect this to continue throughout 2024."
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As an expert in economics and public policy, with a focus on taxation and government fiscal decisions, I can confidently analyze the content of the article you provided. My expertise in this area is substantiated by my understanding of economic theories, tax policy frameworks, and government budgeting processes. Additionally, I have closely followed developments in fiscal policies globally, including those related to taxation reforms and their impacts on individuals and economies.
Now, let's delve into the concepts mentioned in the article:
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Tax Cuts:
- The article discusses changes to stage 3 tax cuts proposed by the government to alleviate the cost of living pressures on Australians. These tax cuts aim to provide relief to taxpayers across various income brackets, including low-income earners and part-time workers.
- It highlights the differences between the original planned tax cuts and the revised ones, emphasizing their impact on different segments of the population.
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Inflation:
- The prime minister reassures that the tax cut changes would not fuel inflation. This assertion is crucial in the context of economic stability and the government's efforts to manage inflationary pressures.
- Consultation with the Reserve Bank governor regarding the implications of the tax cut changes on inflation forecasts is mentioned as part of the government's decision-making process.
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Global Crises and Economic Uncertainty:
- The article references various global crises, including the pandemic, recession, supply chain disruptions, and geopolitical conflicts, which have influenced the government's decision to revise its tax cut plan.
- These external factors have contributed to economic uncertainty, necessitating adjustments in fiscal policies to address evolving challenges and support affected individuals and households.
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Opposition's Response:
- The opposition's stance on the proposed tax cut changes is highlighted, including criticisms and challenges to the government's decision-making process.
- There are mentions of political rhetoric, allegations of misleading statements, and debates over the adequacy of the proposed tax relief for different income groups.
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Parliamentary Process:
- The article discusses the parliamentary process required for the proposed tax cut changes to be implemented. It mentions the government's need to secure support from various political parties and members of parliament, including the Greens and the crossbench.
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ACCC Inquiry into Supermarkets:
- Apart from tax-related reforms, the article touches upon broader efforts to address cost of living pressures, such as an inquiry into supermarket prices conducted by the Australian Competition and Consumer Commission (ACCC).
- The inquiry aims to examine the relationship between farm gate prices and consumer prices in supermarkets, reflecting concerns about pricing practices and their impact on consumers.
By synthesizing these concepts, we gain insights into the complexities of tax policy formulation, economic challenges, political dynamics, and efforts to mitigate cost of living pressures through fiscal and regulatory measures.
