The Coalition will not support Labor’s election-eve tax cuts in the federal budget, calling the changes a “cruel hoax” that will do little to improve standard of living.
“Seventy cents a day, in a year’s time, is not going to help address the financial stress Australian families are currently under. This is an election bribe by a weak prime minister,” the shadow treasurer, Angus Taylor, said moments after the changes were announced.
The unexpected centrepiece of Jim Chalmers’ fourth budget was a pledge to give taxpayers a $268 tax cut in 2026, then $538 each year afterward. The treasurer called it “modest but meaningful”, admitting the changes would not make an enormous difference but describing them as a “top up” in addition to the previous Labor changes to the Coalition-legislated stage-three tax cuts.
Chalmers said the two-step tax cut was designed to deliver the biggest relative benefits to workers on lower incomes. The policy will reduce the lowest tax rate from 16% to 15% from the middle of next year, and then again to 14% from mid-2027. The tax rates apply to annual earnings between $18,201 and $45,000.
“That’s our very deliberate effort to recognise that people are still under cost-of-living pressures,” Chalmers told Guardian Australia.
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The Coalition had pledged that taxes would always be lower under a Peter Dutton government than they would be under Labor, with Chalmers’ election pledge placing pressure on the opposition to either match or reject the changes. Barely 20 minutes after the treasurer announced the tax cuts in his speech, Taylor said the Coalition would not support the changes.
Responding to Taylor’s statement on X, workplace relations minister Murray Watt wrote: “Fantastic. Well done. Great move Angus.”
With the federal election expected to be called by Anthony Albanese as early as this Friday, Taylor claimed the budget was about “the next five weeks, not the next five years”.
“This is a budget for an election, not one for our country’s future prosperity,” he said in a statement.
“At a time when living standards have suffered the biggest collapse on record and when the security environment is the most dangerous since the second world war, Labor’s budget has failed to deal with the economic and national security challenges our country faces.”
“Labor’s cruel hoax tax changes in 2026-27 fail to restore the standard of living you have lost after three years of Labor.
“Tonight’s budget confirms you are poorer after three years of the Albanese Labor government.”
In a surprise move, Labor brought on a parliamentary vote on the changes on Wednesday morning, in apparent bid at forcing the Coalition to vote against the tax cuts on the parliament record – and to wedge the opposition into having to pledge to repeal the legislated cuts if they won office.
When asked on the ABC if the Coalition will not be offering personal income taxes as part of the election, Taylor said: “That’s not what I said. I said we will not be supporting what Labor has proposed in this budget and that’s what we’re responding to tonight.”
The Coalition had initially opposed Labor’s plans to remake the stage-three tax cuts, but later supported them.
Taylor’s statement did not promise lower taxes under the Coalition, or give any hint about the opposition’s tax policy. Instead he said “the Coalition will show leadership and take the necessary decisions to get our economy and our country back on track”.
“A Coalition government will always better manage the economy so we can pay for essential services and keep our country safe and secure,” he said.
“And a Coalition government will increase Defence spending to keep our country safe and secure in an uncertain world. Australians deserve better than this weak and incompetent Labor government. Ask yourself: are you better off than you were three years ago? The answer is no. Australians cannot afford another three years of this Labor government.”
