Anthony Albanese promises millions of Australians huge tax cuts

The prime minister has admitted the government will have to place a cap on spending when it hands down its first budget, but promised to keep legislated tax cuts.

Anthony Albanese said while the federal budget will fulfil commitments Labor made at the election, there was a difficult fiscal repair job ahead.

But Labor will honour the implementation of the stage-three income tax cuts in 2024 which will create a flat rate of 30 per cent between $45,000 and $200,000.

The move mostly benefits those earning more than $120,000 who are currently taxed at 37 per cent, meaning workers earning $90,000 a year will save $1,125.

The Albanese Government has confirmed there will be another Federal Budget handed down on 25 October 2022, just months after Scott Morrison’s government delivered a Budget in March.

‘We’re going to have to really put the brakes on some of the spending which is there,’ Mr Albanese told the ABC’s 7.30 program.

Millions of taxpayers are set to benefit from tax cuts, lose the Low and Middle Income Tax Offset and receive government support when buying their new home (stock image)

‘There are a range of things we would like to do that we won’t be able to do in our first budget.

‘We will also be going through line by line, looking at the waste which is there, and already, we’ve identified a range of measures that were made by the former government that frankly don’t stack up.’

Mr Albanese said election commitments of cheaper childcare, setting up Jobs and Skills Australia and climate change policies would be key themes of the budget.

However, he said he would not repeal income tax cuts for high income earners, which had already been legislated.

‘They are legislated, and one of the things that people have a right to believe is that when a politician makes a commitment before an election, they keep it, and I intend to do that,’ Mr Albanese said.

‘What we need as well is to have certainty, people have made assessments based upon the certainty that comes through legislated tax changes, and we intend to fulfil that.’

The new government was elected in the wake of rising cost of living pressures and soaring inflation levels, which have reached some of the highest rates in decades.

Australia’s 2.7 million minimum wage and low-paid workers on awards are receiving a wage increase of up to 5.2 per cent – the most generous in 16 years to cope with soaring inflation and cost of living pressures.

From July 1, this will see the lowest paid receive $812.60 a week, an increase of $40, and $21.38 an hour, up $1.05.

The Fair Work Commission awarded an increase slightly above inflation, to ‘protect’ the real wages of the lowest paid, as part of its annual national wage review affecting one in four workers or up to 2.7 million employees.

The prime minister said there was a need to have talks with the states and territories about services able to be provided by the federal government following constraints on the economy.

Mr Albanese (pictured on June 23) said election commitments of cheaper childcare, setting up Jobs and Skills Australia and climate change policies would be key themes of the budget

‘We know that we’ve got the NDIS (which) has been growing, we know there are other pressures as well,’ he said.

‘We know they’ve got to be paid for, we know one way we can do that is to grow the economy, but we need to examine it and have that national discussion.’

Millions of taxpayers are set to benefit from tax cuts and receive government support when buying new homes. 

Labor will support the implementation of the stage-three income tax cuts in 2024 which will create a flat rate of 30 per cent between $45,000 and $200,000.

The move mostly benefits those earning more than $120,000 who are currently taxed at 37 per cent.

A worker earning $90,000 a year could save an extra $1,125 on taxes while a resident earning $200,000 a year could enjoy another $9,075.

Labor will also honour the abolition of the Low and Middle Income Tax Offset.

Income earners on up to $126,000 have received the lower and middle income tax offset worth up to $1,080 a year each financial year since 2018-19. 

Unemployed Australians receiving Centrelink payments will be left behind after Labor ditched its plans to review the rate of JobSeeker (pictured, Centrelink queues in Canberra)

The offset was due to end when stage two tax cuts came into play but was extended for two more years after the cuts were brought forward to 2020 due to the pandemic.

The end of the rebate means that Aussies earning up to $126,000 will pay up to $1,500 more income tax in 2023 than this year.

Unemployed Australians receiving Centrelink payments will be left behind after Labor ditched its plans to review the rate of JobSeeker. 

Former Labor leader Bill Shorten said he would set up a review into the allowance during the 2019 election, but the promise was quietly ditched. 

A single person currently earns $642.70 a fortnight or $46 a day.

Treasury spokesman Andrew Leigh said his party had not ‘committed to an additional increase’. 

Labor has dropped its 2019 policy to ban negative gearing, a major tax bonus for property investors which economists say pushes up house prices.

Labor has dropped its 2019 policy to ban negative gearing, a major tax bonus for property investors which economists say pushes up house prices (pictured, a Melbourne property auction)

Mr Albanese has proposed a ‘help to buy’ scheme which would see the government take a 40 per cent stake in up to 10,000 homes a year.

The scheme will only be available to couples earning less than $120,000 and singles earning less than $90,000. 

Labor admitted that if someone on the scheme starts earning over the threshold then they will have to buy out the government’s stake – or sell the house.

This would also apply if the owner died and their children who inherited it earned over the threshold.

Mr Albanese will also create a $10billion Housing Australia Future Fund to build 30,000 new social and affordable housing properties in its first five years.

Former Labor leader Bill Shorten said he would set up a review into Jobseeker during the 2019 election, but the promise was quietly ditched (pictured, Centrelink queues in Brisbane)