Federal Opposition Leader Bill Shorten is set to unveil his own plan for tax cuts when he delivers budget reply speech tonight in Canberra.
The debate over the Coalition’s plan to restructure the tax system has become even fiercer of late after this was made the centerpiece of Treasurer Scott Morrison’s third budget.
Labor has already consented to throw its weight behind the Government’s first round of tax cuts, for low and middle-income earners. However, it is opposing pressure from the Coalition to back the second phase of the plan, which would drastically simplify the tax system and place majority of Australian workers in the same tax bracket.
Shorten is expected to use the speech tonight to cite another way to lessen the tax burden on Australians.
He would also up the ante on his criticism of the Government’s tax cuts for huge businesses, and pledge that a Labor government would allocate more resources into schools and hospitals.
The stand-off over tax policy could make it very challenging for the Government to live up to its vow to deliver the first round of tax cuts from July next year.
Those tax cuts are worth up to $530 and 10 million workers on low and middle incomes stand to benefit.
The Coalition could divide its tax package to claim those tax cuts through the Senate, while eluding a political row over its long-term plans
But Prime Minister Malcolm Turnbull and Morrison have been insistent that the package could only be passed as a whole.
“No, we will not split the bill, we will not split the bill,” said Finance Minister Mathias Cormann.
“The Prime Minister, the Treasurer, myself, every member of the Coalition, we are totally committed to the whole seven-year tax-reform package.”
As it is, some Coalition MPs relayed political reality would force the Government’s to act.
They projected that the leadership team would find a way to get the first round of tax cuts ratified this year, while sending trickier negotiations over tax reform further into the future.