Scott Morrison says he is confident the government will pass its tax cut legislation through Parliament this week, as Labor reveals it will consider backing the government’s $158bn plan in full.
After Labor MPs resolved on Monday to try to convince the Senate crossbench to split the legislation to defer tax cuts for higher income earners and bring forward relief for low and middle income earners, the prime minister said he would not consider the compromise bid.
“That’s not what I put to the Australian people, and that’s not what they voted for,” Morrison told ABC’s 730.
“They voted for the personal income tax plan that we set out in the budget, which was a responsible plan that dealt with the immediate requirement to ensure that we put more money back in people’s pockets – money they earned, keeping more of what they earned – and moving to the structural reform in a way, and on a timetable, that was supportive of our budget strategy.”
“That’s what we set out, that’s what we put to the Australian people, and that’s what we intend to legislate this week.”
As the Coalition accuses Labor of standing in the way of the tax cut package it took to the election, the opposition is weighing up whether to support the full three-stage plan if the government refuses to amend the legislation.
The shadow treasurer, Jim Chalmers, said that if the party’s attempt to hive off stage three of the tax cuts was unsuccessful – which is likely given the government has already rejected the compromise position – the party would then reassess its position.
“We’re going to put all of our effort into our amendments. If those amendments are unsuccessful, then we will consider our options at that point,” Chalmers said, saying the party would go through its “usual discussions” before landing on a position.
But Chalmers said he did not believe it was economically responsible to support the third stage of the package, which will flatten the tax rate to 30% for all workers earning between $45,000 and $200,000 in 2024.
Labor opposes the third tranche because about about $30bn of the $95bn cost flows to Australians earning more than $180,000, and is instead calling for the bill to be split and for tax cuts for those earning up to $120,000 to be fast-tracked.
“The Liberals are proposing tax cuts on the never-never,” Chalmers said. “If we want to get serious about boosting this floundering economy, we need to do something about it, and Labor is proposing a constructive way forward.
“We don’t think it’s responsible to sign up to stage three of the tax cuts, which cost $95bn and don’t come in for another five years.”
The Coalition has already made clear it will reject any changes to the bill, and Labor is refusing to say what it will do when given the “all or nothing” choice when the legislation is voted on this week.
At a meeting of caucus, several MPs suggested Labor should not stand in the way of tax cuts, a view that has been made public by frontbencher Joel Fitzgibbon and backbencher Peter Khalil in the lead-up to today’s meeting.
One MP also expressed concern that the debate over tax cuts was overshadowing Labor’s message on other issues, such as penalty rate cuts.
Following the meeting, Fitzgibbon said the party had not yet decided whether it would vote down the tax cuts but said he would support the decision of shadow cabinet.
“I think it’s unwise for political parties to get between a taxpayer and a tax cut but that’s exactly what the government is doing by knocking back what is a very reasonable and responsible position on our part,” he said.
Amid the party’s wrangling over its final position on the policy, the Labor leader, Anthony Albanese, warned MPs about the importance of speaking with a “single voice” after details of the party’s shadow cabinet debate on tax cuts were leaked.
The message from Albanese was that while debate in the lead-up to a decision was “healthy”, there needed to be solidarity within caucus once the party had landed on its position.
The treasurer, Josh Frydenberg, said the tax office had already changed its systems in preparation for the legislation to be passed and said Labor had “learned nothing” from the election result.
“Only the Coalition can be trusted to reduce taxes for low and middle-income earners, that is what our tax cuts will do – both short-term relief … and long-term reform,” he said. “We are doing everything we can to make sure this legislation goes through.”
The government will introduce the legislation to the House of Representatives on Tuesday.
Earlier on Monday, Albanese said the party was focused on “trying to win in the Senate” and would recalibrate its position in response to how the crossbench lined up on the bill.
The government has 35 seats in the Senate and needs the support of four crossbenchers to pass legislation. It has the support of Cory Bernardi, and is negotiating with the two Centre Alliance senators and independent Jacqui Lambie.
The finance minister, Mathias Cormann, is leading the negotiations.
One Nation, which controls two Senate votes, has indicated it will vote against the package.
