Sussan Ley retreats from comments suggesting Coalition would repeal Labor’s stage-three tax cut changes

The deputy opposition leader, Sussan Ley, has walked back earlier comments suggesting the Coalition would repeal Labor’s revamped tax cuts that more than double tax relief for Australians on the average income.

On Thursday, Ley clarified that the opposition’s position is to “support the existing stage-three arrangements” but denied promising to roll them back in a bid to head off a Labor campaign that the Coalition will claw back low and middle-income tax relief.

Labor MPs and the treasurer, Jim Chalmers, had seized on Ley’s earlier suggestion the Coalition “absolutely” supports a repeal to argue that the opposition will fight the next election promising to tear up tax cuts that are more generous to 11 million Australians.

In a demonstration of the dilemma more generous tax cuts present to the Coalition, the opposition leader, Peter Dutton, painted Labor as the threat to its own new policy.

In his regular 2GB Radio spot, Dutton questioned how voters could “believe these tax cuts will survive if Labor is re-elected” given the government’s “credibility issue” after abandoning stage three.

On Thursday the prime minister, Anthony Albanese, will address the National Press Club defending Labor’s change of policy on stage three and promising “broader and better tax cuts” that will benefit taxpayers earning less than $150,000 a year by making tax cuts less generous for high-income earners.

Anthony Albanese announces revised stage-three tax cuts – video

Before the release of the full details of the package, Ley was asked on Sky on Wednesday whether if the Coalition wins the election it will “roll back whatever changes are made”.

Ley replied: “Well this is our position. This is absolutely our position and the point is … it was Labor’s position too.”

Ley accused Labor of breaching its election commitment, arguing Albanese’s credibility is in “tatters” due to the deliberate “lie” about supporting stage three.

On Thursday Chalmers accused the Coalition of playing the “usual mindless, nasty, negative politics” because they don’t want Australians to “focus on the fact that everybody is still getting a tax cut, more people are getting a tax cut [and] more people are getting a bigger tax cut”.

“Their policy is to go to the election to jack up taxes on middle Australia in order to pay for an even bigger tax cut for people on high incomes, Sussan Ley has made that clear,” he told ABC TV.

Ley clarified her position on Thursday. “I did not say that we will roll back Labor’s new proposal,” Ley told Radio National. “I said we support the existing stage-three arrangements and we would assess the new proposal.

“Labor lied about these tax cuts and now they have lied about what I’ve said.

“Our position is that the stage-three tax cuts should be implemented as designed and endorsed by the Australian people at the last election.

“The tax plan we support is the tax plan we took to the last election.”

Ley rejected Labor’s justification for changing the tax cuts, arguing that cuts that will last for decades should not be decided by “cyclical” factors such as wars and interest rate rises.

Labor ad for stage-three tax cuts

On Thursday Dutton told 2GB that Labor had “blatantly, knowingly lied to the Australian public”, likening it to Julia Gillard’s promise not to legislate a carbon tax.

“People have budgeted based on the prime minister’s word, his bond,” he said. “Now he’s broken that. Some may get a handful of dollars, but they lose it because of mortgage repayments that are higher under this government, and inflation will be higher for longer under this government.”

Dutton said if Albanese is “prepared to lie to your neighbour, you’re next”.

Under the tax changes, the lowest rate of tax on income from $18,200 to $45,000 will be lowered from 19% to 16%.

Albanese will tell the National Press Club this means “taxpayers earning less than $45,000 will now receive a tax cut” and “every working Australian will pay less tax on the first $45,000 that they earn”.

Albanese promises that “all 13.6 million taxpayers” will receive a tax cut. Labor caucus was told on Wednesday that 84% of Australians would be better off, although the stage-three tax cuts will be less generous for higher income earners.

That is because the new plan retains the 37% tax rate, which will apply from income earned between $135,000 and $190,000.

The stage-three tax cuts, legislated to take effect in July, would have flattened the marginal rate of tax on income between $45,000 and $200,000.

High-income earners earning $200,000 or more “will still get a substantial tax cut, over $4,500”, Albanese will say, although this is half the $9,000 they were set to receive under the stage-three tax cuts.