The independent senator David Pocock has called on the Albanese government to use $28bn of savings from its new tax-cuts package to increase welfare payments and urged Labor to trim other tax concessions.
With the Greens signalling that they will press Labor to recoup even more from high-income earners, Pocock has suggested the revamp of stage three should be a springboard to other tax reforms in the too-hard basket including capital gains tax.
Labor’s new tax cuts, unveiled by the prime minister on Thursday, would give back $359bn over 10 years to Australians, delivering bigger savings to all taxpayers earning less than $146,486 and doubling tax relief for those on the average income, while reducing the benefits for high-income earners.
The tax cuts are broadly budget neutral over four years, but collect $1.3bn more than the Coalition’s stage-three plan in the first year and $28bn more over 10 years.
Pocock said Labor’s changes ensure “those who need more cost-of-living relief get a bigger tax break”, responding to community desire for cuts that are “fairer and better fit for purpose for the current economic environment”.
“I would also like to see the government use the current and expected future surplus to lift the safety net for those doing it hardest and further increase Austudy, jobseeker and other income support payments,” the ACT senator said.
“Most importantly this needs to be the beginning of much-needed tax reform of everything from how we tax resources through the [petroleum resource rent tax] to capital gains tax discounts on investment properties to multinationals who seem to be able to not pay much tax here.”
Anthony Albanese was asked on Saturday if he would dedicate the surplus to increasing welfare payments following Pocock’s calls. But the prime minister said there was no surplus money from the package, and said the changes were about doubling the benefit for the average worker.
“We know that low and middle income Australians are under financial pressure,” he told reporters. “It’s a responsibility of the government to do something about it. We’re determined to do something about it. We have made the right decision for the right reasons, and this will help particularly middle Australia.”
On Friday the treasurer, Jim Chalmers, was asked about further changes to negative gearing and franking credits, two reforms that Labor proposed in opposition but ditched after losing the 2019 election.
“We haven’t changed our view on that,” Chalmers said. “We have changed our view on the income tax cuts … We haven’t changed our view on those other proposals.”
On Thursday Anthony Albanese was similarly asked about other tax concessions including negative gearing. “The only consideration that we have had here is cost-of-living pressures,” the prime minister told reporters in Canberra. “None of the things you refer to will go anywhere near any of that.”
Albanese said he was “confident” of the package passing parliament. The opposition leader, Peter Dutton, said Labor had broken its election commitment to maintain the stage-three tax cuts and argued the new plan should be taken to an election. But on Friday Albanese noted that Dutton “wasn’t even saying necessarily that they will vote against it”.
“We’ll wait for them to go through their mechanisms as well,” Albanese said. “We’ll talk with all of the crossbenchers.”
On Friday the Greens leader, Adam Bandt, suggested that despite the changes to stage three, the new package did not provide enough cost-of-living relief.
“We now have the chance … to really tackle inequality and the cost of living and housing crisis in this country,” he told Radio National.
“If we’re going to change the legislation, then we should do it in a way that really supports low- and middle-income earners.”
The Labor package gives a tax cut to every taxpayer, including the cohort earning between $18,200 and $45,000 who were due to miss out under stage three.
The Australian Council of Social Services chief executive, Cassandra Goldie, said the Labor plan was a “better deal for people earning low, modest and middle incomes” but it “does not yet help people on the lowest incomes facing the most severe crisis: people whose incomes are below the tax [free] threshold and pay no tax”.
“People receiving income support payments are worst affected by the cost-of-living crisis,” she said.
“Jobseeker and related payments must be urgently raised and without further delay. Our unemployment payment is just $54 per day, or $19,000 per year. The government must not leave behind the people already in poverty.”
Albanese has said tax cuts “will not be the end” of cost-of-living relief, but on Thursday did not commit to further improvements for those receiving government payments.
He noted previous measures such as increases to rent assistance and jobseeker had been “targeted at people outside the tax system”.
