Treasurer Jim Chalmers is hit with a BRUTAL question after Albo broke key election promise on Stage 3 tax cuts

Treasurer Jim Chalmers was asked why the public should trust the government again after the Labor administration broke its election promise over Stage 3 tax cuts.

The ABC’s 7.30 host Laura Tingle described the backflip on the key election pledge as a ‘huge political call’.

‘Why should voters trust the government’s promises in the future?,’ Ms Tingle asked the Treasurer.

Mr Chalmers defended the controversial decision, claiming it will allow the government to offer ‘more help for more people’. 

The ABC’s 7.30 host Laura Tingle (pictured) described the backflip on the key election pledge as a ‘huge political call’. ‘Why should voters trust the government’s promises in the future?’,’ she asked the Treasurer

‘Well, we have changed our view, and we’ve changed our view because we’ve found a better way to provide more cost-of-living relief to more people in a way that doesn’t add to inflation,’ Mr Chalmers replied.

‘And so the proposal that the Prime Minister will put forward tomorrow means more help for more people.

‘It means a tax cut for every taxpaying worker. And it will be better for Middle Australia; better for cost-of-living pressures, better for women and workforce participation’ better for nurses and teachers and truckies.’

Anthony Albanese pledged at least 36 times during the election he would make no changes to the legislated cuts introduced by the Morrison government. 

But on Wednesday afternoon Labor MPs gave their unanimous support to a decision to halve the benefit to Australians earning over $180,000 in favour of a boost to lower earners.

While the official announcement will not come until Thursday when the Prime Minister addresses the Press Club, it’s understood Labor will reduce the tax rate for people earning between $19,000 and $45,000 from 19 per cent to 16 per cent. 

That will give those on $45,000 a year an extra $932 a year. 

Mr Chalmers defended the controversial decision, claiming it will allow the government to offer ‘more help for more people’ (pictured with Anthony Albanese )

Part-time workers and the very low paid are expected to be able to earn up to $19,000 annually tax-free, up from $18,200. 

That is worth up to an extra $152 a year for those on $19,000-a-year. 

A worker on $100,000 would have received an extra $1,375 come tax time under the original plan. Now, they’ll take home almost double: $2,179. 

The marginal 32.5c tax rate is set to be cut to 30c and the tax band for middle-income workers is also increasing from $120,000 to $135,000, according to the leaks out of Cabinet.

Those on $120,000 a year will now be $2,807 a year better off, while those on $135,000 will benefit by a total of $3,857 a year.

Earlier Cabinet leaks revealed key parts of the Stage Three tax cuts most beneficial to high income earners above $180,000 would be scrapped. 

Mr Albanese at the National Press Club on Thursday, will justify his decision to help low-and middle- income earners at the expense of wealthier Australians, selling it as a ‘tax cut for everyone’ which will benefit all taxpayers.

‘This is a plan for middle Australia that delivers for every Australian taxpayer, right up and down the income ladder,’ he will say.

Bracing himself for further pressure over Labor’s decision, Mr Albanese will justify the significant overhaul by saying ‘when economic circumstances change, the right things to do is change your policy. That’s what we are doing’.

Last year, Mr Albanese and Treasurer Jim Chalmers commissioned senior Treasury and Finance officials to canvas options for providing cost-of-living relief for Australians.

In his speech, Mr Albanese will quote that advice, which outlines that the positive economic outlook forecast from almost five years ago ‘have not come to pass’.

‘This is the right decision, for the right reasons and we’ve made it the right way,’ he will say.

‘It’s the best way forward, because it’s the best way to help Australians struggling with their cost of living without putting pressure on inflation.’

Deputy Opposition Leader Susan Ley said, if elected, the Coalition will roll back any changes made by Anthony Albanese on the stage three tax cuts – accusing the Labor party of having ‘won on a lie’.

‘This is absolutely our position,’ she told Sky News. 

‘And the point is, it was Labor’s position too. The promise that’s been made, the promise that’s been broken, the lies that have been told to the Australian people.’

‘All of this has been decided without proper consultation with the Australian people.

7.30 host Ms Tingle put the claim that the election was ‘won on a lie’ to the Treasurer who then seized on the Ms Ley’s claim the Liberal party would roll back on the cahnges. .

‘And as I understand it, the Deputy Opposition Leader said today that if they are elected, they will unwind these changes,’ Mr Chalmers said.

‘That means the Liberals and Nationals are going to the election with a policy to increase taxes on Middle Australia in order to fund even bigger tax cuts for people on the highest incomes.’