News National Labor’s tax-cut strategy: Keep an eye on the crossbench and play it by ear

Labor’s tax-cut strategy: Keep an eye on the crossbench and play it by ear

Labor's position on the tax-cut package will be determined in large part by how parliament's crossbench independents are leaning. Photo: Getty
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Labor’s position on the federal government’s promised tax cuts may shift throughout the week as it learns whether crossbenchers back the full $158 billion package, according to frontbencher Katy Gallagher.

The Coalition needs the support of four of six crossbenchers to get its full three-stage plan through the Senate when parliament resumes this week.

It has refused to give any ground to Labor, which has offered to support extra tax relief if the second stage of the package is brought forward and the third stage is shelved.

Senator Gallagher says Labor will consider what to do when the full bill comes before parliament when its caucus meets early in the week.

But what they decide may not be the party’s final position, as they keep an eye on whether the government gets enough crossbe

Opposition frontbencher Katy Gallagher says Labor’s strategy is fluid. Photo: AAP

nch support.

“We would have to take decisions based on what was happening at the time,” Senator Gallagher told Sky News on Sunday.

“There’s always elements of having to make decisions as the situation unfolds in parliament.”

The first stage of the plan will mean extra cash for low and middle-income earners in coming months.

Labor wants the second stage, which is due to kick in from 2022/23, to be brought forward to the coming financial year.

This stage will top-up a low income tax offset and mean more people – earning up to $45,000 instead of $41,000 – will get a 19 per cent tax rate.

The final stage will flatten the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.

Among Labor’s concerns about the third stage are that it will be locked in too far in advance and there may not be enough money in the budget to reduce the amount taken from workers’ earnings.

“I don’t think it’s been explained about how that’s to be paid for,” Senator Gallagher.

The opposition is also concerned too much of the benefit may flow to people earning more than $180,000 each year, who are less likely to spend the cash and stimulate the economy.

Modelling released on Friday by the Parliamentary Budget Office showed 22 per cent of the total package will flow to people earning more than that figure.