Coalition remains ‘on the fence’ towards income tax cuts

Peter Dutton, leader of the Coalition, has hinted that Liberal might consider cutting income tax based on upcoming budget allocations and inflationary side effects.

In a joint press conference on Monday, Dutton was asked if he would introduce a pre-election policy to cut income tax following “vague wording” and lack of clarity on the matter.

Dutton said the policy would be dependent on the delivery and outcome of the federal budget.

“We have a track record of dealing with economic management and making economic decisions, including tax cuts. Don’t forget we were the people in government who were the architects of stage one, stage two and stage three tax cuts.”

“If we can afford to do tax cuts, we will, but it will depend on how much money is in the budget, what’s going to be inflationary, what other measures are floating around at the time, and I think that’s the prudent approach that you would expect us to take,” he said.

Following the response, Dutton was questioned if he was trying to make the point that introducing income tax cuts could be inflationary, to which he replied: “I’ve just made the points that I wanted to make.”

In a report by the ABC, it was noted it would be unlikely for the Coalition to offer any tax cuts based on the longstanding Coalition budget rule which would limit the amount of federal taxation to 23.9 per cent of the size of the Australian economy.

“This means the Coalition can commit to a 23.9 per cent limit without needing to provide any cost policy for tax cuts in the election campaign,” the ABC said.

“The Coalition’s commitment to 23.9 per cent amounts in practice to a promise for tax cuts at some point over the decade, but without details about what form they would take.”

According to the Opposition, the Labor government had contributed to fuelled inflation and failed to tame it effectively, which would have the effect of increasing interest rates.

Under the Labor government, average Australian families were paying $4,000 more in tax which the Opposition would look to change based on the details of next week’s budget, Dutton said.

In a statement made by shadow treasurer Angus Taylor on Monday, it was noted Treasurer Jim Chalmers had confirmed he was unaware of how much he was taxing Australians.

Taylor said Australians were paying more because of “Labor’s reckless policies and irresponsible spending.”

“The Treasurer confirmed today that despite higher taxes and high inflation, he has turned windfall surpluses into ongoing deficits, which will only put further pressure on prices and further pressure on debt,” Taylor said.

“Labor has broken every promise on tax it made before the last election, and hard-working Australians are paying the price. Labor abolished the tax cap in its first budget, the Coalition will restore it.”

The ABC noted Chalmers responded to Taylor’s comments by saying the latter “had a lot of nerve talking about the tax cuts when he tried to prevent 3 million people getting the tax cut that Labor is delivering.”