The Senate is heading for a fiery showdown over the Turnbull government's personal income tax package after the Labor caucus unanimously agreed to only back the reductions that start on July 1.
This includes a new low- and middle-income tax offset worth up to $530 for individuals and an increase in the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
The opposition doesn't support further reductions due in 2022 and 2024.
Caucus met in Canberra on Tuesday to confirm Labor's position.
"If the Labor party is asked to vote 'yes' or 'no' on the total package including stages two and three, we will vote 'no'," shadow treasurer Chris Bowen told reporters after the meeting.
Furthermore, if the coalition manages to get the entire package passed by the Senate, Labor plans to repeal stages two and three if it wins government.
"We're prepared to do what we think is responsible," Mr Bowen said.
However, the government has repeatedly said it will not split the seven-year, three-stage plan that was announced in the May budget, saying it is all or nothing, setting up a high stakes game of political brinkmanship.
The coalition insists it "won't be blinking" as the tax debate descends into a game of "chicken".
Treasurer Scott Morrison took to social media to state the government's case.
"Unless we take action now, incoming years Australians will have more of what they earn eaten away in higher taxes caused by bracket creep," he said in a Facebook video.
Liberal senator Richard Colbeck also urged Labor to "get out of the way" and wave through the full package.
"They're trotting around telling everyone that they have a bigger tax cut, but they're not in government, they can't deliver a bigger tax cut," Senator Colbeck told reporters.
"If (Bill Shorten) wants to put up his own tax plan, he can do that when he's in government."
While the Australian Greens supports attempts to split the government's income tax cuts it will vote against them regardless of whether or not the bill is amended.
Without the support of Labor and the Greens, the government could still get the cuts through with the help of Pauline Hanson's One Nation or independent senator Tim Storer.
But while Senator Storer supports the first tranche of cuts, he too wants the package split and is hopeful the government will warm to his "prudent and sensible" plans.
"There's an opportunity - they don't need to render it dead," he told ABC radio.
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