Opposition Leader Angus Taylor has accused the Albanese government of “trapping” Australians in an economy going “backwards” ahead of the May 12 budget.
It comes as the Albanese government is poised to announce a major tax break for working Australians, with Treasurer Jim Chalmers considering green-lighting an “earned income offset” up to $300 for every taxpaying wage or salary earner.
Labor is looking at raising further cash from tax breaks and incentives for property investors, including the CGT break, negative gearing policies and family trusts.
However, Mr Taylor said the up to $300 tax offset was “another thought bubble” which would not save Australians from becoming “trapped” in Labor’s economy.
“Labor has trapped every Australian into an economy that’s not working for them. An economy that is going backwards. An economy where you can’t get ahead,” Mr Taylor told Sky News Political Editor Andrew Clennell.
Asked whether he would stand in the way of another tax cut, Mr Taylor insisted he needed to see more detail, but that he ultimately wanted more money back in the pockets of Australians.
“I absolutely want to see tax cuts for Australians … but the real trap here is Labor trapping Australians into an economy that has been a disaster for them,” he said.
“There’s Australians out there hurting today, because this government promised that inflation was going to come under control, interest rates were going to come under control and it hasn’t happened.”
Pressed on the fact that additional tax cuts would “push inflation up”, Mr Taylor said it was dependent on the overall budget position.
“And what we’ve heard from the Reserve Bank Governor today, is that the government spending is driving inflation and driving up interest rates, that a government-directed economy is not the answer,” he said.
“We need a private sector that can invest and make it easier to get on and do things. And we’re seeing the exact opposite from this government right now.”
On Tuesday, households were dealt the third interest rate rise of the year, as the RBA lifted the cash rate by 0.25 per cent to 4.35 per cent.
RBA governor Michele Bullock acknowledged that government spending had made the central bank’s inflation fight more challenging.
“We have a situation in Australia prior to the war, where we had demand above supply,” Ms Bullock told reporters after handing down the hike.
“The ability of the economy to supply the goods and services that were being demanded in total, including by government and by the private sector, was that was outstripping the ability of the economy to supply it.
“The extent to which government make up the shortfalls for households by giving them more money, it makes it harder to dampen demand.”
Mr Taylor said Australians were “giving up hope” after the RBA’s repeated tax hikes.
“Australians are giving up hope and this interest rate increase is a real kick in the guts for Australians, but it’s driven by this government’s homegrown inflation that’s come from Canberra,” he said.
Mr Taylor said in terms of what Labor would put on the table in the budget, which the Coalition has not seen, he did want to see lower taxes.
As for the “attacks on trusts” to justify Labor’s reduced taxes on wages and salaries, the Opposition Leader said the Albanese government was “going after everything” which did not constitute a tax decrease.
“They’re going to go after homes, they’re going after investments, they are going after trusts. Who knows what else they’re going to go after?” Mr Taylor said.
“It doesn’t sound to me like tax cuts. It sounds to me tax increases.”