“And let them be a judge of his character,whether he’s fit to be prime minister of this country,whether they can ever trust him again.”

While Dutton called for an election,there cannot be an early election at this point because there is no bill being blocked in parliament in a way that would provide a trigger for a double dissolution of parliament under the Constitution. The Parliamentary Library says the earliest date for a standard election is August 3.

Dutton said Albanese was panicked and that his leadership was “terminal” because he could not be trusted again.

But Dutton hedged on whether the Coalition would repeal the Labor tax package if it won power at the next election,saying the position would be decided “in due course” but that he believed in lower taxes.

Labor caucus members have backed their version of the stage 3 package and dared the Liberals to try to block the changes after Liberal deputy leader Sussan Ley raised the prospect of restoring the Coalition package to offer bigger tax cuts to wealthier workers.

Ley was asked on Sky News on Wednesday morning:“Will you roll back whatever changes are made?”

She replied:“Well this is our position. This is absolutely our position.”

Ley did not use the word “rollback” and said on Thursday morning the stage 3 tax cuts should be implemented as endorsed at the last election,without saying whether this meant repealing the Labor package.

The government plans to introduce the tax changes soon after parliament returns on February 6 and has eight sitting weeks to pass the law before the tax cuts apply from July 1,forcing the Coalition to decide if it will vote for or against bigger tax cuts for millions of workers.

Labor estimates its version of the stage 3 package delivers more generous tax cuts to 11.5 million workers with incomes of up to about $150,000 a year.

The changes to the original Coalition package mean smaller tax cuts for at least 1 million workers,however,and someone on $200,000 a year will see their tax cuts halved to about $4500 a year.

The $28 billion revenue forecast emerged as a key dispute because it showed Treasury assumed that many workers would pay more tax over time as their wages rose,in part from “bracket creep”,in which inflation increases taxable income and pushes people into higher tax brackets even when their earnings have not grown in real terms.

Treasury estimated the original stage 3 package would cost $388 billion over a decade and the revised package would cost $359 billion over a decade because there would be a $28 billion improvement in overall personal tax revenue over that time.

The updated Treasury numbers show the cost is higher than an earlier estimate from the Parliamentary Budget Office on the original stage 3 showing a $323.6 billion cost over a decade.

The Treasury findings include a key conclusion that a worker on about $70,000 a year – close to the average full-time wage – will receive a tax cut of $1429 under the new policy compared to only $625 under the original stage 3 package.

While the gains will be eroded by inflation over time,Treasury concludes that it would take six years for the average worker to lose the gains from bracket creep under the new package but would have taken four years under the original one.

Treasurer Jim Chalmers will point to these findings to argue that the Labor version of the stage 3 package does more to address bracket creep for workers on low and middle incomes,shielding them from inflation.

Dutton,however,cited the $28 billion as proof that some would suffer when their pay increased into higher tax brackets and said this meant “aspirational” workers would lose under Labor.

The government’s argument for the new package centres on claims that circumstances have changed since the stage 3 package was set in law in 2019 because of the war in Ukraine,the impact on energy prices and the knock-on consequences for inflation.

Albanese said this meant the impact on the cost of living was greater than forecast when he pledged to keep the stage 3 tax cuts in their original form at the 2022 election.

“The right thing to do is what we are doing today – keeping the amount of the tax cuts that were envisaged but doing it in a way that helps lower and middle-income earners,” Albanese said at the National Press Club.

“This is good economic policy. And good economic policy matters. That’s why we are doing it.”

The Treasury advice concludes that people will work more,and that this will help the country deal with labour shortages,because the tax cuts give people on lower and middle incomes a greater incentive to work.

It says the new plan will lead to a 0.25 per cent increase in the labour supply,equivalent to 930,000 hours of work every week. It said this was double the increase in the original stage 3 plan.

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