‘Completely unacceptable’: Angus Taylor vows to maintain tax cuts irrespective of inflationary environment in 2024

Shadow treasurer Angus Taylor has remained steadfast in seeing the stage three tax cuts come into effect regardless of the economic situation two years from now.

On Tuesday the Reserve Bank of Australia forecasted that CPI inflation for 2024 will be just above three per cent, higher than the target rate of two to three per cent.

Mr Taylor was asked whether his stance would change on the cuts, which are due to come into effect in 2024, in a high inflationary environment.

“You have to remember, both sides of politics went to the last election with an ironclad promise, no asterisks, no footnotes, to support the stage three tax cuts,” he told the National Press Club on Wednesday.

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“There was no ambiguity about this.

“Further than that, they are in legislation. So to move away from them now, I think, is just completely unacceptable.”

In the lead up to last week’s Federal Budget there was speculation the forthcoming cuts could be amended or scrapped altogether.

Concerns had been raised that the massive tax cuts, which target those earning between $45,000 and $200,000, would add to inflationary pressures.

Under the stage three tax plan, the 37 per cent tax rate will be completely scrapped, with Australians earning between $45,000 and $200,000 moving to the new 30 per cent bracket – which is down from 32 per cent.

The existing sliding scale sees those earning more than $180,000 taxed 47 per cent including a two per cent Medicare levy, and Australians pulling in between $120,000 and $180,000 on a marginal rate of 37 per cent.

Mr Taylor argued that Australia needs a “fast-growing economy” coming out of the economic slump being experienced at present.

“Where people are getting out, investing, building careers, building businesses, having a crack, taking risks, because we know that the only way to drive productivity and investment and drive growth,” he said.

“The best way to do that is say to them, ‘it’s a really simple equation for you, if your income is anywhere out of $200,000, you’re going to keep at least 70 cents on the dollar in your pocket’.

“I can’t think of a simpler, clearer message to Australians to get out there and build a productive capacity of this economy.

“That’s what we need and I think splitting hairs about timing when that’s what we need is the wrong debate.”

Despite keeping the cuts in the budget, Treasurer Jim Chalmers said he has no problem with a conversation around changing the promised measures in the context of tackling massive structural deficit.

Speaking with Sky News Australia’s Business Editor Ross Greenwood at Business Sydney’s Federal Budget Breakfast one day earlier, Dr Chalmers said he wanted to stoke a conversation on the “sustainability of the budget broadly” in the lead-up to last Tuesday.

“I don’t have a problem with people raising it in the context of how we get on top of the structural problem in the budget,” he said.

“It’s not the only way we fix it, doing something different on stage three.”

The budget deficit is now forecast to be $36.9 billion, down $41.1 billion primarily due to higher tax receipts on the back of record low unemployment and surging commodity prices.