Shadow Treasurer Jim Chalmers at the National Press Club on Wednesday.Credit:Alex Ellinghausen
The offset,worth up to $1080,was extended for an additional year in last week’s federal budget but is not an ongoing feature with the third stage of the tax changes benefiting those earning more than $180,000 a year. Labor voted for the three stages of tax cuts ahead of the last election.
“We have supported all along tax relief for workers on modest incomes,we said that since the beginning,and we have done that in the Parliament as well,” Dr Chalmers said. “Our issue is with the mismatch between the temporary nature of the low- and middle-income tax relief versus the permanent nature of the stage three tax cuts,committed by the government on the assumption they would be in surplus by now,and something like $300 billion ago.
“I think it’s right and responsible we have a look at those tax cuts in that light.”
Repairing the budget after major spending measures designed to help boost the economy amid the pandemic and low wages growth affecting the cost of living were at the top of his list of concerns.
“A government of either persuasion at some future point will need to focus on budget repair. And I think the conversation is rightly focused on three ways you can go about that – grow the economy,spending restraint or spending cuts and changes to the tax system,” Dr Chalmers said.
“The interaction between wages and tax cuts is crucial too,” he said,pointing out the temporary tax relief for low- and middle-income earners ends after the next election.
He said Labor did not feel rushed to make a decision about the future of the stage three cuts. Treasurer Josh Frydenberg told Sky News last week opposition leader Anthony Albanese should “walk the talk” on the legislated cuts. There are concerns among Labor MPs that scrapping the already-legislated tax cuts for top income earners would open the party up to an election attack from the Coalition claiming they are hiking taxes.