MICHAEL ROWLAND:
But first, the federal government will today start its campaign to convince Australians that it's done the right thing by halving the stage 3 tax cuts for the highest earners to deliver more tax relief to what the Prime Minister is dubbing middle Australia.
LISA MILLAR:
The Opposition has labelled it a broken promise that Anthony Albanese will today tell the Press Club that economic circumstances have forced a change of plan. Well, Treasurer Jim Chalmers joins us now from Parliament House. Treasurer, good morning welcome to News Breakfast.
JIM CHALMERS:
Thanks very much, Lisa. Thinking about the great people of North Queensland this morning, bracing for more heavy weather.
MILLAR:
Yeah, absolutely, we'll keep following that story and also the impact that it's going to have on so much, including the Budget and economics. I want to talk about the politics of it in a moment but, first of all, what are you offering people here?
CHALMERS:
Well, this is a bigger tax cut for more people to help with the cost‑of‑living. We've come to a different view on these stage 3 tax cuts because we’ve found a much better way to provide more relief to more people who are under pressure. The tax plan that the Prime Minister will outline today is better for middle Australia, it's better for cost‑of‑living pressures, it's better for women and workforce participation. It's better for nurses and truckies and teachers, and it's better for the economy, as the Treasury advice that I will release today will show. Our responsibility here when there is a demonstrably better option available is to take the right decisions for the right reasons even if the politics are difficult.
MILLAR:
Yeah, well, it's not better for more than a million Australians who are now going to have that tax cut that they were banking on making plans on halved.
CHALMERS:
Well, the important point here, Lisa, is that every taxpayer still gets a tax cut including people on higher incomes. We're still lifting that threshold from $180,000 to $190,000. So, that threshold will go up, people on higher incomes will still get a decent tax cut.
MILLAR:
Yeah, but it's gone from a tax cut of around $9,000 to a tax cut of $4,500 so that's a substantial drop.
CHALMERS:
It's a substantial tax cut, Lisa, and when the full tables are released today, what people will see is that everybody who's paying tax and is working will get a tax cut. There'll still be decent tax cuts for people on more substantial incomes but there's a bigger emphasis on middle Australia. The difference between this tax plan that we'll outline today and the one that it replaces is under this tax plan there are tax cuts for more people, there are bigger tax cuts for more people, and that is to recognise the substantial cost‑of‑living pressures that people are under.
MILLAR:
Treasurer, we knew a lot of this when you were going into the 2022 Election. We knew about the Ukrainian invasion, we knew about global economic instability, we knew about the pandemic. Your government was promising to follow through with these stage 3 tax cuts well after the election. So, how do you now say that the economic situation has changed?
CHALMERS:
You're right to point out that those are all things that have happened in the five years or so since Scott Morrison legislated the stage 3 tax cuts. I think most Australians would understand that these cost‑of‑living pressures have been sustained, they have been persistent, and it became increasingly clear to us over the course of the summer that there was a much more effective way for the same amount of money to provide the kind of cost‑of‑living relief that middle Australia desperately needs and deserves. This is about aspiration, it's about people who work hard being able to provide for their loved ones and get ahead and it recognises the economic conditions that we confront right now which are defined by these cost‑of‑living pressures which are putting people under the pump. We don't just acknowledge those pressures we're doing something about it. The best way to do that is to rejig these stage 3 tax cuts so that everyone still gets a tax cut but middle Australia gets a bigger tax cut. More people get a bigger tax cut to deal with these cost living pressures.
MILLAR:
Well, you've delivered the Opposition their advertising campaign for the next election lay down misère. Is the Prime Minister's word, his bond?
CHALMERS:
Well, this is about people, not politics.
MILLAR:
Is the Prime Minister's word, his bond?
CHALMERS:
Well, of course, you build trust by taking the right decisions for the right reasons, even when the politics are difficult. And the Opposition, of course, will play their usual mindless, nasty, negative politics. That's all that they do.
MILLAR:
Why is it negative to pick up on broken promises, though? How do we know, going into the next election, what you promise you will deliver on?
CHALMERS:
Because what this demonstrates is that we have a Prime Minister who is prepared to take the difficult decisions in the interests of the people even when the politics are hard. The reason I'm pointing to the nasty, negative and mindless politics being played by our opponents is because they don't want your viewers to focus on the fact that everybody's still getting a tax cut, more people are getting a tax cut, more people are getting a bigger tax cut and their policy is to go to the election to jack up taxes on middle Australia in order to pay for an even bigger tax cut for people on high income. Sussan Ley has made that clear.
MILLAR:
Yeah, but you're still going to have this problem, aren't you, of trying to convince people if you go to the next election and you say you're not going to change capital gains tax or you're not going to change negative gearing, why wouldn't people say, well, why should we trust you?
CHALMERS:
Because what we've done here is we've come to a different view. We've been upfront about that. We've come to a different view in a methodical way and now we're explaining why the alternative that we are putting forward to the Australian people is better than the old stage 3 tax cuts that Scott Morrison legislated five years ago. We're being upfront with people we are saying we have come to a different view and the reason we've come to a different view is we can provide more cost‑of‑living relief to more people in middle Australia without putting upward pressure on inflation. That's why we've come to a different view. We are not pretending this is an identical view that we have held before. We're explaining why we've changed our view. We have changed our view and it's a change for the better.
MILLAR:
Treasurer, thanks for your time.
CHALMERS:
Thanks, Lisa.