Government appears increasingly divided over stage-three tax cuts


Cracks are emerging within the government’s plan to follow through on stage-three tax cuts, as a senior minister claims Australians earning $150,000 a year are struggling.

Government Services Minister Bill Shorten – who as Labor leader fiercely opposed the former government’s income tax cuts – said inflation and other cost-of-living pressures were harming Australians earning over the $100,000 threshold.

Speaking in defence of the government’s industrial relations reforms, which went on to pass through the senate late on Thursday night, Mr Shorten’s comments come as Treasurer Jim Chalmers contemplates whether to amend the tax cuts, which will benefit workers making more than $120,000.

“What’s motivated this (IR) legislation has been to redress the imbalance in the Australian economy, where basically the share of national income going to pay-as-you-go tax earners has fallen,” Mr Shorten told the ABC on Thursday.

“And I must say, there is an economic benefit to the whole economy. When people have a little bit more money to spend and when you’re on less than, you know, $100,000 or $120,000, $150,000 a year, you spend nearly everything you get.

“What this does is provides economic activity.”

The tax cuts, passed by the former government, are due in July 2024 and abolish the 37 per cent marginal tax bracket completely, and lower the 32.5 rate to 30 per cent.

Essentially, everyone earning between $45,000 and $200,000 will pay the same 30 per cent tax rate – ultimately benefiting workers earning more than $120,000 a year.

Prime Minister Anthony Albanese went to the 2022 election promising no changes to what Scott Morrison legislated, despite it being unpopular with some members of caucus.

Dr Chalmers has indicated he could amend the package, as Australia struggles to fight inflation.

Article Credited to Ellen Ransley,

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