Treasurer Jim Chalmers says the forecast cost of the stage 3 tax cuts has risen and will now cost the nation around $254 billion over 10 years.
From July 2024 anyone earning between $45,000 and $200,000 will be taxed at 30 per cent, while those earning over the highest bracket will have their tax rate set at 45 per cent.
The tax cuts, which will mainly benefit middle to high income earners, were legislated in 2018 and 2019 under the then-Coalition government and involved a number of income tax cuts spread out over a number of years.
Stages 1 and 2 have already been enacted.
However, stage 3 is not set to kick in for another two years and had been estimated to cost around $243 billion over 10 years.
Mr Chalmers says that has now changed.
"From, I think, the last time we had a look at it, we are expecting that equivalent, 10-year cost to be around $254 billion … and, I think, the forward estimated cost, from memory, is just a bit under $41 billion dollars," he said.
This, he said, was "just the update on those already legislated tax cuts but, again, so people are clear, because that's an already legislated policy".
"There isn't a new section in the budget on it," Mr Chalmers said.
When asked if he was alarmed by the increase in the cost of the cuts, Mr Chalmers said it was not surprising, but was not asked what exactly was driving the rise in cost of the tax cuts.
"I think it's been pretty clear to everyone, including all sides of this conversation, that these tax cuts make an impact on the budget but, I think, the point that we've been making is they come in in a couple of years' time," he said.
"We've got more pressing priorities. The budget is not going to be about those tax cuts. It's going to be about really three things: responsible cost-of-living relief, secondly, targeted investments in a stronger more resilient economy and, thirdly, starting to unwind this legacy of waste and rorts in the budget, which has given us that $1 trillion of debt in the first place."
The federal government appears set to maintain the tax cuts in this month's budget, despite looming speculation the multi-billion dollar package would need to be pared back amid a worsening economic outlook.
