Former prime minister Malcolm Turnbull — an architect of the stage 3 tax cuts — says he would not consider them now, given the state of the budget, but that Scott Morrison had made the situation worse by increasing their costs.
"I don't think you would legislate them, certainly not in the way they were changed in 2019, today," he told the ABC's The Business.
"That made it very, very expensive."
However, he said Labor had made the mistake of promising to keep the controversial tax cuts at the last election, and it could not break that promise.
To break a promise just six months after an election would be "politically naive" and the "electoral damage would be considerable", Mr Turnbull said.
"There is a big issue of integrity here," he said.
"The Liberal Party lost the election this year in large part because people were disappointed with Scott Morrison on matters of trust. Integrity was on the ballot."
Asked whether sound fiscal and economic management would be preferred by the electorate over keeping an election promise, Mr Turnbull said it would not.
"I think trust is absolutely critical, if you want to make major tax changes, you really need to take them to an election," he said.
In 2018, when he was prime minister, Mr Turnbull called the clearing of the suite of tax cuts through the Senate "the most comprehensive reform of personal income tax in a generation".
However, that was before a global pandemic and an energy crisis drained the government's bank account and threw deep shade over the economic outlook.
There is now a growing chorus of calls to dump the third stage of the cuts, which would cost the budget around $254 billion over 10 years.
Stage 3 abolishes the 37 per cent marginal tax rate completely, and lowers the 32.5 per cent marginal tax rate to 30 per cent.
However, lowering the 32.5 per cent rate was not part of the original legislation passed in 2018 by the Turnbull government.
That additional cut came in Scott Morrison and Josh Frydenberg's 2019 budget, and added $90 billion to the tax cut bill.
"With hindsight, these changes were regrettable," Mr Turnbull said. "Most of the cost in the stage 3 tax cuts arose out of the 2019 budget."
While pointing out that the federal budget has a serious revenue shortfall, Mr Turnbull dismissed any suggestion that scrapping tax concessions on superannuation for the extremely wealthy would be an "easy win".
The Association of Superannuation Funds of Australia is leading calls for the government to limit the amount of money people can have in super to $5 million.
Currently, there is no limit to how much money can be parked in super at the heavily discounted tax rate of 15 per cent, and a $5 million cap would likely raise around $1.5 billion a year in additional tax.
Mr Turnbull said that, even though it was hard to defend extremely wealthy people being able to have such favourable tax treatment, he would caution Labor against thinking changes to the arrangement would be easy to get through.
His idea for raising money to pay down the deficit?
"It may be, dare I say it, a carbon tax."
