Govt will honor promise to cut taxes: Treasurer

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Chalmers said the budget was “burdened by debt”, but the government needed to focus on immediate pressures such as inflation and falling real wages.

“What we need to do is focus on what we can influence right now,” he said.

Former Nationals leader Michael McCormack has said the government should not “crab” away from tax cuts that would bring higher incomes to millions of Australians.

Nationals MP Michael McCormack said the third stage of tax cuts would lead to higher wages for millions of Australians.Credit:Alex Ellinghausen

“Labour talks about raising people’s wages. Giving people a tax cut increases their income and helps with cost of living pressures,” he said.

“Some things have changed, but not that hard-working Australians shouldn’t get more of their hard-earned income back.”

Opposition Leader Peter Dutton said Prime Minister Anthony Albanese must keep his promise to keep the legislative changes.

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“The Prime Minister promised the Australian public ahead of the election that he would not sacrifice Stage Three tax cuts – which would see 95% of Australians pay 30 cents on the dollar or less,” he said.

“If he now tries to walk away from the tax cuts that were promised, that people voted for Labour, then that is a major breach of trust and faith with the Australian people.”

A Labor MP, who spoke on condition of anonymity, said it would take a change in public attitude towards tax cuts and a significant change in the circumstances of the budget to justify the break of the party’s promise to honor the package.

They said there had been some change in the community over the tax cuts while there were clear questions about their impact on the budget outcome.

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But they also pointed out that staying loyal to voters, who knew Labor had backed the tax package ahead of the election, would also be a key issue if the debate continued.

Backbench Labor MP Mike Freelander said he was a little worried about tax cuts for the wealthiest people.

But Liberal Senator Andrew Bragg said there was no reason to abandon the statutory tax cuts.

“It’s important to combat support creep, which is why the third-stage cuts must remain,” he said.

Bragg said he would still support a tax cut if it helped investment, and that the government should maintain Stage Three cuts but also look at corporation tax.

Cut through the noise of federal politics with news, opinion and expert analysis from Jacqueline Maley. Subscribers can sign up for our weekly Inside Politics newsletter here.

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