Federal politicians will pocket more than $18m over the next decade from the stage three tax cuts, with an immediate $2m boost to the pay packets of all 227 MPs and senators from 2024.
As parliament resumes on Monday for three days of sitting before budget week, the Greens have released new modelling from the parliamentary budget office that outlines the benefits set to flow to MPs as a result of the already legislated tax cuts.
The modelling shows that 227 parliamentarians, all of whom earn a base annual salary of at least $211,250, stand to benefit from an average tax cut of about $10,000 once the third stage of the package comes into effect from 2024-25, totalling $3.9m over the forward estimates and $18.6m over the decade.
The Greens have been ramping up pressure on the government over the measure, saying it should scrap the tax cuts that will cost $243bn over the decade and redirect the savings into free childcare, putting dental into Medicare, and affordable housing.
“Labor shouldn’t give politicians and billionaires a $9,000-a-year tax cut, especially while everyday people are suffering through a cost of living crisis,” the Greens leader, Adam Bandt, said.
“We are four weeks from the budget and the calls for the repeal of Labor’s stage three tax cuts are growing stronger and louder. If money’s as tight as the treasurer says it is, Labor should repeal the stage three tax cuts.”
Under the third stage of the tax cuts that were legislated with Labor’s support in 2019, the $120,000-to-$180,000 tax bracket will be removed, the top tax bracket threshold will increase from $180,000 to $200,000, and the marginal tax rate for those earning between $45,000 and $200,000 will drop from 32.5% to 30%.
When asked about his commitment to the tax package, the treasurer, Jim Chalmers, said his focus was on more pressing concerns in the economy as he prepared to deliver his first budget on 25 October, while suggesting the need to start a “national conversation” about the fiscal challenges ahead.
Anthony Albanese has said the government is standing by the controversial tax package, but has left open the possibility of making changes in line with its previously expressed concerns about the overwhelming benefits to high income earners.
On Sunday, the assistant treasurer, Stephen Jones, said the government was facing “very tough economic circumstances” ahead of the budget, pointing to inflationary pressures arising from the war in Ukraine and the economic pressures in the US and Europe.
“Despite all of these challenges, Labor is committed to implementing our election policies,” Jones said.
The government will this week introduce legislation for its signature childcare policy, along with a bill for a new national anti-corruption commission which it hopes to legislate before the end of the year.
Amid growing concerns about the cost of living, Jones defended the government’s decision to end the 20c cut to the fuel excise this Wednesday, in line with the timetable put in place by the former Coalition government before the election.
“We know that this is going to be tough on motorists,” he said. “We know that we’ve got to make some tough decisions, and I think Australians understand … that we can’t keep writing, as the former government did, billion dollar checks and letting the debt mount up and up and up.”
The shadow finance minister, Jane Hume, said it was up to the government to decide whether to extend the measure, saying “we don’t have policies, we are in opposition, not in government”.
“It’s time that the Labor government consider the priorities of that spending, and whether it is a good idea to go ahead with it,” she told the ABC’s Insiders program.
“I would like to see a very cautious budget and I would like to see Labor reprioritise their spending commitments.”
“What it does need to do is address the other cost of living pressures that are facing Australians.”
Jones said it was an “extraordinary admission” from Hume that the Coalition did not have alternative policies.
“If the Coalition hasn’t got any policies of its own, they should get out of the way of the government implementing its policies,” he said.
Hume said the government would consider supporting the government’s childcare package and the bill for a new integrity commission, but the opposition was waiting to see the detail.
