Anthony Albanese has given his strongest indication yet that the controversial stage-three tax cuts are here to stay, saying voters want to see more integrity in politics and he is keeping his election promises.
The defence minister, Richard Marles, has also put his department on notice that it would not be immune to the search for savings even as the government’s first budget is expected to confirm an overall increase in military spending.
After a robust internal and public debate over the past week about whether the government would amend the stage-three tax cuts in the 25 October budget, the prime minister has repeatedly hosed down expectations that the package could be tweaked this year, regardless of growing pressures on the budget.
On Monday, he went further, suggesting that the tax package was here to stay as he was “making sure that we implement the policies that we took to the election”.
“We’ve been doing that. Peter Dutton’s been opposing it,” he told ABC Radio.
“They [the opposition] need to, I think, get the message, which is that Australians want a new form of politics. They want politics to operate differently. They want more integrity.”
When asked if he would “concede” that his position “could change next year”, Albanese said: “Well, no. There’s been no change in our position.
“What we have done is that in framing the budget … [we] point towards the challenges which we’ve inherited. We’ve inherited a trillion dollars of debt in the budget, we know that central banks around the world are having the fastest-ever tightening of monetary policy in decades, and … that’s placing pressure on family budgets as their mortgage repayments increase.”
He said the government’s focus was on immediate cost of living relief, pointing to legislation for cheaper childcare, cheaper medicines and reducing taxes on electric vehicles.
The stage-three tax cuts, introduced by the Morrison government and passed with Labor’s support in 2019, scraps the $120,000-to-$180,000 tax bracket, lifts the top tax bracket threshold from $180,000 to $200,000, and puts in place a 30% tax rate for income between $45,000 and $200,000.
The cost to the budget is $243bn over 10 years from when they come into effect in 2024, with the benefits flowing predominantly to higher-income earners.
Albanese’s comments come as the treasurer, Jim Chalmers, heads to Washington this week for the G20 meeting of finance ministers and central bank governors as well as to meet the chair of the US Federal Reserve, Jerome Powell.
The government on Monday released data suggesting a series of defence projects were running behind schedule and $6.5bn over budget, leading to speculation some projects could be cut or delayed in this month’s budget.
Marles said Defence was “not immune from scrutiny when it comes to carrying its weight” on budget repair and must “justify every dollar it spends”.
He said the government was “totally focused on a quality and accountable spend in defence” in contrast to what he labelled “hopeless mismanagement” from the Coalition. But when pressed on whether some defence projects could be deferred or cancelled in the forthcoming budget, Marles played down the prospect of imminent changes.
Marles said he would not preempt the defence strategic review – led by the former defence force chief Angus Houston and the former defence minister Stephen Smith – which is due to report back early next year.
The nuclear-powered submarine taskforce is also due to finish its work in March, meaning the May budget is likely to be when the steep costs of Aukus are finally factored in to the government’s spending plans.
The opposition leader and former defence minister, Peter Dutton, defended his management of the portfolio, insisting that the Coalition had delivered record defence spending and negotiated the Aukus partnership. Dutton said Labor was “trying to create a distraction away from what was a disastrous week last week on stage-three tax cuts”.
“It’s just comical,” Dutton told reporters in Bundaberg on Monday. “We put more money into defence than Labor ever did.”
The Greens said it would not support “budget austerity measures to help Labor fund their stage-three tax cuts for politicians and billionaires”.
The leader of the Greens, Adam Bandt, said the party would “fight to make sure Labor’s craven capitulation is short-lived”.
