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April 17, 2025
Thursday 17 April 2025
Adriana Mageros
Sky News
Opposition Leader Peter Dutton has vowed to reform the tax system through changes to personal income tax should the Coalition be voted into office, as federal election campaigning heats up ahead of polling day on May 3.
The Coalition has already pledged to slash the fuel excise by 25 cents per litre, in a bid to help take the financial pressure off Aussies struggling amid a cost of living crisis.
Mr Dutton has also made election promises around housing, offering $1,200 tax cuts to help first home buyers break into the property market.
Speaking to The Australian, Mr Dutton outlined his tax reform vision under a Coalition government which includes the prospect of indexing income tax thresholds to address bracket creep.
However, Mr Dutton acknowledged the measure would be costly to introduce and could only be done once the budget is back in balance.
"I want to see us move as quickly as we can as a country to changes around personal income tax, including indexation, because bracket creep, as we know, is a killer in the economy," he said.
"It stifles productivity and entrepreneurialism and hard work, but we need to do it at a time when the budget can afford to do so.
"It would be an aspiration of our government to achieve that because it provides equity in the tax system and it is costly to do so."
Mr Dutton noted his tax indexation plan was aspirational rather than a firm commitment, taking aim at the Labor over its budget deficits.
The Liberal leader touted the Coalition's cost of living relief measures, which he claimed would provide "immediate assistance economy wide".
"The Labor government, over the last three years, people have gone backwards," Mr Dutton said.
"We’ve had seven consecutive quarters of negative economic growth in households here, which has put people back years and years."
Speaking to Sky News Australia about the Coalition's tax plan, shadow home affairs minister James Paterson hit out at Labor over its economic management.
"It (the tax proposal) is certainly aspirational because the reality is Labor has done extraordinary damage to the books and we're going to have to spend quite some time cleaning up that damage," he told host Peter Stefanovic.
"There are deficits as far as the eye can see."
The Albanese government's budget posted a deficit of $27.6 billion, which is forecast to soar to $42 billion in financial year of 2025-2026.
Asked when the Coalition would therefore implement the tax changes, Mr Paterson said a Dutton-led government would be keen to introduce the reform as soon as possible but reiterated it could only be done after the budget is back on track.
"We think dealing with the insidious problem of bracket creep which has been so out of control on this government's watch," Mr Paterson said.
"People have been paying up to $3,00 more in tax than they were three years ago because of bracket creep.
"We want to fix that problem but only once we've got Labor's mess under control."
In the federal budget, Treasurer Jim Chalmers announced the Albanese government's promise of $5 per week tax cuts as part of a $17 billion tax cut package.
The Coalition however has since vowed to repeal the tax cuts if voted into office, describing them as an “election bribe”.