Bill Shorten promises bigger tax cut if Labor wins next election

Bill Shorten wins applause from colleagues after his reply to the budget. Picture: Dominic Lorrimer
Bill Shorten wins applause from colleagues after his reply to the budget. Picture: Dominic Lorrimer

Labor will offer millions of workers a tax cut of up to $928 a year in a bid to ramp up pressure on the Turnbull government to split its sweeping budget tax cuts into separate bills to prevent Australians being denied immediate savings.

Opposition Leader Bill Shorten will put the $5.8 billion tax pledge at the heart of his pitch to voters at the next election, adding a huge premium to the $530 cut the government outlined in last week’s federal budget.

Mr Shorten outlined the Labor tax plan in a budget reply speech that also vowed to pay down debt faster than the coalition while promising more funds for medical scans and help for students in vocational education.

The tax pledge dramatically expands the first stage of the government’s seven-year reform plan in a way that targets workers on low and middle incomes, amid a growing row over the fairness of later stages that extend the tax relief to those on higher incomes.

Labor estimates its tax plan sacrifices $5.8 billion in revenue over four years on top of the government plan, which costs $13.4 billion over four years.

Mr Shorten contrasted his tax pledge with Prime Minister Malcolm Turnbull’s continued support for a company tax cut that Labor says will cost $80 billion over a decade.

“At the next election there will be a very clear choice on tax: 10 million Australians will pay less tax under Labor,” Mr Shorten told Parliament on Thursday night.

“We can afford to cut your taxes, without cutting services, because unlike the Liberals, we’re not wasting $80 billion on a discredited giveaway to the top end of town.”

The government is offering up to $530 to workers earning up to $125,000 a year from July 1 in the form of an offset paid as a tax refund, or used to reduce a tax debt, when they file their tax return at the end of the 2018-19 financial year.

Mr Shorten said he would support the $530 offset for the year ahead, but would increase it to $928 in the year starting July 2019 if Labor won the next election, which is due by May next year.