Coalition likely to back tax changes after shadow cabinet meeting
Paul Karp
The shadow cabinet met last night to discuss Labor’s proposed revamp of stage-three tax cuts.
We understand from several Coalition sources that the majority view in the opposition leadership is not to block Labor’s tax cuts, which deliver bigger cuts to low- and middle-income earners. This is consistent with the holding line that the Coalition are the parties of lower tax and would not be taking money off anyone.
Given all the Coalition rhetoric attacking Anthony Albanese for abandoning stage three, we thought it might try to promise to abolish the 37% tax rate in addition to Labor’s changes. Apparently not.
The Australian reports that the Coalition will look for a new policy to improve the budget bottom line and hand back bracket creep. This is consistent with what one source told us – that it is not feasible for the Coalition to come up with a new policy in two weeks.
The opposition may avoid getting wedged on tax by Labor’s plan but it will need to do a lot more work to create its own. Labor’s plan is budget-neutral over four years but gives back $28bn less tax over 10 – so there is some money to play with, but not for several years.
It’s also unclear how Peter Dutton will maintain the rage about stage three if the Coalition is no longer proposing to deliver it. Perhaps it was spooked by Jim Chalmers’ sums that doing Labor’s plan and stage three together would cost $40bn.
The tax plan will be discussed in the Coalition party room today.
Key events
Caitlin Cassidy
(continued from previous post)
The latest data shows 31.4% of government school students are from a low socio-educational background, compared with just 13.2% of non-government school students.
Last year, Guardian Australia revealed private school funding had increased at almost double the rate of government school funding in the decade since the landmark Gonski review recommended changes designed to fund Australian schools according to need.
From 2012 to 2021, per student funding to independent and Catholic schools rose by 34% and 31% respectively, while funding to public schools increased by just 17%.
Caitlin Cassidy
Government funding to private schools has increased by 15% in a single year and is vastly outpacing funding to public schools despite Labor’s commitment to close continued equity gaps in education.
On Monday, the productivity commission’s report on government services showed non-government schools received $19.9bn in 2021-2022, a $2.6bn increase from 2020-2021 ($17.3bn) and equating to a 15% annual jump.
Some $2.3bn came from the Commonwealth – who provide the bulk of private school funding.
Government schools received $58.7bn, a $3.8bn increase from the previous year ($54.9bn) and just a 7% increase overall.
In total, governments spent $78.7bn on school education in 2021-2022, with states and territories funding 68.1% of the total, slightly less than 2020-2021 (69.2%).
It comes as nationally, government schools carry a higher proportion of students from equity groups including Aboriginal and Torres Strait Islander students, students from poor backgrounds, students with disabilities and geographically remote students.
(continued in next post)
Finance services minister, Stephen Jones, who is a favourite target of the Coalition, has started the parliamentary year on the offence, pointing out that the opposition has still not named a shadow finance services minister.
Stuart Robert had the gig, but he resigned from parliament in May last year (how time flies) and so far, the position has remained vacant.
Jones says Australians “deserve more than an empty chair from the Liberals” but there are those in the Liberal party who argue that an empty chair might do a better job than Jones does.
Church service marks start of parliamentary year
Before the argy bargy of parliament starts, there is the annual start of the parliament year church service – this year it’s at St Andrew’s.
There is always some sort of sermon on togetherness and unity, which the MPs all nod along to and then seem to forget the moment they are on the church steps.
Coalition likely to back tax changes after shadow cabinet meeting
Paul Karp
The shadow cabinet met last night to discuss Labor’s proposed revamp of stage-three tax cuts.
We understand from several Coalition sources that the majority view in the opposition leadership is not to block Labor’s tax cuts, which deliver bigger cuts to low- and middle-income earners. This is consistent with the holding line that the Coalition are the parties of lower tax and would not be taking money off anyone.
Given all the Coalition rhetoric attacking Anthony Albanese for abandoning stage three, we thought it might try to promise to abolish the 37% tax rate in addition to Labor’s changes. Apparently not.
The Australian reports that the Coalition will look for a new policy to improve the budget bottom line and hand back bracket creep. This is consistent with what one source told us – that it is not feasible for the Coalition to come up with a new policy in two weeks.
The opposition may avoid getting wedged on tax by Labor’s plan but it will need to do a lot more work to create its own. Labor’s plan is budget-neutral over four years but gives back $28bn less tax over 10 – so there is some money to play with, but not for several years.
It’s also unclear how Peter Dutton will maintain the rage about stage three if the Coalition is no longer proposing to deliver it. Perhaps it was spooked by Jim Chalmers’ sums that doing Labor’s plan and stage three together would cost $40bn.
The tax plan will be discussed in the Coalition party room today.
Good morning
Welcome to the first sitting day for 2024.
We arrive in the middle of Australia’s latest tax battle for voters hearts and minds – the Coalition, after a big song and dance about broken promises (which was completely ridiculous) will now not stand in the way or delay the Albanese government changes to the stage-three tax cuts.
Instead the Coalition is going to try to shape the battle around what it would do and how Labor is still failing on the tax front.
So consider this week a forerunner for your immediate future.
We’ll have all the rest of the parliament shenanigans – we are now officially back in the re-election zone, so it can only get more unhinged from here.
You have Paul Karp, Josh Butler, Daniel Hurst and Sarah Basford Canales to guide you through the week, with Mike Bowers already in the building and sniffing out what’s what. And you have me, Amy Remeikis, back with you for another parliamentary year.
I’ve already had three coffees. Ready?
Let’s get into it.
Sarah Basford Canales
Opponents of ‘reckless renewables’ to protest in Canberra
Community groups and politicians opposing offshore windfarms and “reckless renewables” will converge on the lawns of Parliament House this morning.
Despite the wet weather, organisers are expecting a turnout of at least 1,000 people to oppose the federal government’s rollout of renewable energy, which includes wind and solar farms, batteries and the transmission lines needed to connect power to homes and businesses.
The rally, which is described as “grassroots”, has particular issue with the government’s “short, insincere, and unacknowledged community consultation”.
It is urging the government to suspend the rollout of renewables until a Senate inquiry is launched looking into the “technical veracity as well as the excessive economic, social and environmental costs”. It is also calling for the nuclear power ban to be overturned.
One of the rally’s organisers, Sandra Bourke, told my colleague Ariel Bogle she isn’t a climate change denier or against renewables. She said she’s instead against the pace of the government’s rollout of renewables without adequate community consultation.
A list of Nationals and Liberal MPs and senators are listed as speaking at the event, including Barnaby Joyce and Jacinta Nampijinpa Price, alongside members of One Nation and the United Australia party.
But the rally will be countered by progressive advocacy group, Get Up, which has organised a pro-renewables roaming billboard to circle Parliament House all day.
Get Up’s CEO Larissa Baldwin-Roberts said:
Our political leaders should be supporting communities in the face of climate impacts and phasing out polluting fossil fuels with a fast, fair transition to clean renewable energy … instead, hard-right politicians like Barnaby Joyce are spreading lies and disinformation to stop progress on climate action for their mining mates, win back power, and tank renewable energy.
Paul Karp
National seats stand to gain most from tax cut reforms, analysis shows
The progressive thinktank Australia Institute has released an analysis about the winners from Labor’s proposed tax changes, finding that taxpayers in Nationals seats stand to gain the most.
The Nationals’ 16 electorates are set to receive an extra $451m a year in tax cuts, an average of $326 a taxpayer. That’s $100 more than the average taxpayer in Liberal seats ($226) and Labor seats ($229).
Of Australia’s 151 electorates, 127 will be better off under the restructured cuts, with just 24 worse off.
Australia Institute senior economist, Matt Grudnoff, said:
The majority of taxpayers across Labor, Liberal and Coalition electorates will be winners under the government’s restructured tax cuts … If the Nationals, in particular, were to vote against this legislation, then taxpayers in their electorates would have the most to lose.
This shows just how damaging Coalition’s original Stage 3 cuts were to Australia’s social and economic fabric. Redistributing the bulk of the tax cuts to low- and- middle- income earners will help those doing it the toughest while preserving the progressive nature of our tax system.
The Australia Institute analysis confirms earlier analyses by the treasurer’s office and the Australian National University’s Ben Phillips that working class outer urban and regional seats stand to gain the most.
The ‘right decision at the right time’
A parliamentary showdown is looming on the future of stage-three tax cut changes, with laws enshrining the alterations to be introduced to parliament, Australian Associated Press reports.
Legislation backing broader tax cuts will be brought forward to the House of Representatives today as federal parliament meets for the first sitting day for 2024.
While the government has come under fire from the opposition for breaking an election commitment to leave the stage-three tax cuts untouched, prime minister Anthony Albanese signalled that the move was necessary. He told a caucus meeting yesterday:
This will be a debate that we’re not just willing to have, but enthusiastic about having, because it is about looking after people.
We’ve made a right decision at the right time, for the right reasons.
Under the tax changes, people earning under $150,000 will receive a larger tax cut, while those earning above that amount will still receive benefits but less than previously forecast under the original stage-three proposal.
Welcome
Good morning and welcome to our live politics blog. My name’s Martin Farrer and I’m here to bring you the overnight headlines before Amy Remeikis returns to the chair for 2024’s first sitting week.
Peter Dutton is poised to accept Labor’s changes to the Coalition’s stage-three tax cuts after party room meetings today. Reports suggest Dutton, who at first vowed to repeal the changes in full, will agree to the tweaks that will put more money back into the pockets of low- and middle-income earners by making planned tax cuts for the wealthy smaller. Legislation backing the Labor changes will be brought forward to the House of Representatives today, as federal parliament meets for the first sitting day for the year. More coming up.
Community groups and politicians opposing offshore windfarms and “reckless renewables” will converge on the lawns of Parliament House this morning as their campaign gathers momentum. It is expected that about 1,000 people opposed to the federal government’s rollout of renewable energy, which includes wind and solar farms, batteries and the transmission lines needed to connect power to homes and businesses, will join the protest backed by some notable Coalition figures such as Barnaby Joyce and Jacinta Nampijinpa Price.
Talking of the Coalition, it was a rollicking second episode of the ABC documentary Nemesis last night with Malcolm Turnbull unloading on his enemies. Focusing on his term as prime minister between 2016 and 2018, the exposé of Coalition infighting heard Turnbull describe his then-treasurer Scott Morrison as “duplicitous”, recall that Tony Abbott promised to be “very fucking difficult” as revenge for being ousted in a coup in 2016, and dismiss Dutton as a “thug”. All that and a tetchy phone call with Donald Trump, plus handling Joyce’s infidelity.