The Turnbull government has seized on new analysis showing middle income earners will be the biggest winners from its income tax cuts, and has called on Labor to drop its opposition to the reforms.
Addressing the NSW Liberal Party State Council in Sydney on Saturday, Prime Minister Malcolm Turnbull said most of the benefits of the $144 billion tax cuts would go to middle-income earners.
“The gap between us and the Labor Party is widening every day, and nowhere is the difference more stark than on tax,” Mr Turnbull said.
“(The plan) is fair, it’s progressive, it maintains the progressive nature of the tax system, but above all, it reaches out to hard working Australians, hard working families on middle incomes.”
A breakdown of Treasury figures published in The Weekend Australian and Fairfax Media shows that after 2024, when the last stage of the plan kicks in and the 37 per cent tax bracket is done away with, relief will almost entirely go to those earning between $120,000 and $200,000.
Treasurer Scott Morrison said the Treasury figures put a hole in Labor claims that the cuts will favour the rich.
“This is a plan anchored in middle income Australia,” Mr Morrison told reporters in Sydney on Saturday.
“If (Labor) want to put a higher tax on middle income Australians, that’s their choice. They have it all there. They have no more excuses.”
Labor will continue to look at further costings of the plan provided by the government this week, but remains determined to split the bill.
The opposition supports the first tranche providing $530 in annual tax relief for low and middle income earners, and is still deliberating the government’s proposed cuts in 2022.
But it has “grave reservations” about the changes in 2024.
“For the Labor Party to want to cut that in two, and strip away that tax relief, while at the same time add even more tax burden… the Australian economy is crashed by those sorts of policies,” Mr Morrison said.
Shadow treasurer Chris Bowen said people could make their own judgement about what counts as middle or high income, but claimed the top 20 per cent of earners would get the biggest benefit from the government’s cuts.
“Our policy provides better tax relief to every Australian earning less than $125,000, not on the never-never, not two terms away, in the first year of a Shorten Labor government,” he said.
“Here we are three weeks after the budget and the Treasurer still is being forced to drip-feed information about their tax cuts scheme out selectively.”