Government holds firm with tax cut plan despite Labor not giving full support

The Morrison government will reportedly try to make the Senate sit without a break until its tax cuts are passed.

The government's leader in the Senate Mathias Cormann will reportedly put forward a motion to the Senate on the first sitting day next week to ensure the upper house sits until legislation for all stages of the tax cuts are passed.

The coalition's determination comes despite Labor confirming it will only support the first two parts of the three-stage tax relief plan, The Australian reports. 

Opposition Leader Anthony Albanese says the government has a choice between an outcome and an argument.

"We've put forward a proposition that would see immediate tax cuts passed faster, higher tax cuts for every single worker in the economy," he told ABC AM on Tuesday.

"And we can do that in one day, we promise to expedite the package."

The government needs the support of Labor or at least four crossbenchers to get its full package through the Senate.

Prime Minister Scott Morrison made his first major address since the election on Monday, calling on Labor to back the Coalition's tax-cut plan.

“Our job post-election is now very clear ..." Mr Morrison said in a speech to the Western Australian Chamber of Commerce and Industry in Perth. 

"To get Australians off the economic sidelines and onto the field again."

Scott Morrison speaks at the Chamber of Commerce and Industry in Perth.
Source: AAP

With a focus on driving forward the economy, Mr Morrison has prioritised income tax cut legislation, proposed to come into effect through a three-stage plan.

“That's what tax relief is all about,” Mr Morrison told reporters after the forum.

“It's all about backing Australians, that they are in a better place to decide how their money should be spent, how they should invest it, than governments.”

“That's why we're such keen supporters of tax relief, both today and in the future.”

The Coalition's major election-promise aims to cut income tax from 32.5 cents to 30 cents in the dollar for people earning a paycheck between $45,000 and $200,000.

“We have been very clear about where we stand on this issue - where Labor sits on this issue is a complete mystery,” Mr Morrison said.

Mr Morrison after NSW won Game 2 of the 2019 State of Origin series at the weekend.
Source: AAP

At a shadow cabinet meeting in Melbourne, Opposition Leader Anthony Albanese urged the Coalition to accelerate infrastructure projects, announcing Labor will not back the Coalitions $158 billion, 10-year tax plan in full.

“Stage one – of course, we will continue to support that stage and express disappointment that the Government has breached its clear commitment to bring in stage one by July 1,” Mr Albanese said.

Shifting its stance, stage two of the tax plan will also be supported by Labor - on the condition that the Morrison Government implement and deliver the $1,350 benefit as soon as July this year.

This would deliver an extra $300 than originally allocated under the Coalition's proposal.


Shadow Treasurer Jim Chalmers and Opposition leader Anthony Albanese speak in Melbourne.
Source: AAP

Shadow Treasurer Jim Chalmers said stage two should be “brought forward in a fiscally responsible way, in a way that doesn’t jeopardise the forecast surplus for 2019-2020 and the subsequent surpluses”. 

“It’s true that we have shifted our position since the election,” he said.

“We have done that because as Anthony rightly says, people expect us to do what we can to do the right thing by the economy."

Labor frontbencher Joel Fitzgibbon has warned the shadow cabinet against blocking the Coalition's full tax plan.

“We can’t afford to give our political opponents the opportunity to blame us for a bad economy,” he told ABC radio.

But Labor will not give the Coalition the green light for stage three - proposed for 2024 and to cost $95 billion. 

“We need action now and some of the government’s proposals, of course, are off in the never-never,” Mr Albanese said. 

Mr Albanese cited economic irresponsibility to pass legislation beyond a government’s current term. Labor has therefore called for a deferment of the tax plan’s stage three, demanding the Coalition to split it from the bill put to parliament next week.

Finance Minister Mathias Cormann, in turn, labelled Labor fiscally reckless.

“Labor is being economically irresponsible and fiscally reckless,” he told The Australian.

“They are wanting to run the budget and the government from opposition, holding Australian workers who voted for lower income taxes to ransom."

The stance has left the Morrison government dependent on the Senate crossbench, calling on their support to pass the election-promise tax package. 

One Nation leader Pauline Hanson, who controls two votes in the Senate, says she spoke with Labor leader Anthony Albanese on Monday to discuss her position on the tax cuts.

"I'm going to have further talks with him next week because I want to see what the impact it is on the budget by passing the first and second stage," she told Sky News.

One Nation has ruled out supporting the coalition's entire tax plan, saying infrastructure spending and ensuring cheaper power should be a priority.

With additional reporting: AAP

Published 24 June 2019 at 6:32pm, updated 25 June 2019 at 10:33am
By Jennifer Scherer