The Coalition’s new leadership will seek to win back a reputation of party of lower taxes and better economic managers, after former leader Peter Dutton nixed their tax cut proposals before the last election.
Opposition Leader Angus Taylor and deputy Jane Hume said on Sunday they wanted to return their party to its roots and reprioritise boosting productivity – leaving the door open to budget cuts.
The pair held the shadow treasury and finance portfolios at the last election when the Coalition under Peter Dutton opposed Labor’s marginal tax cut and suggested the money be spent on defence instead. Taylor immediately conceded after ousting former leader Sussan Ley on Friday that policy had been a mistake, and began pitching a directional change.
“All Liberals know instinctively that the Liberal Party should always be, and must always be, a party of lower taxes because we know that when taxes are lower, Australians get a chance to get ahead,” Jane Hume told ABC’s Insiders on Sunday. “We know when taxes are lower, the economy grows without creating inflation.”
Taylor identified the lack of tax cuts as a bad call in his first press conference as leader on Friday, and on Sunday said the best place to find money was through a non-inflationary, fast-growing economy.
When asked about Dutton’s decision to oppose Labor’s tax cut, Taylor said: “I proposed a way forward with lower personal income taxes, and that is already something I’ve put on the record.”
“We need to convince Australians that we will be the party of lower taxes, and we will take a strong, strong policy package to the next election,” Taylor said, speaking separately on Sky News.
“Under Labor, we are seeing rising personal income taxes. I mean, they carry on about how they’re bringing down personal income taxes. Well, fine, we made a mistake in the election campaign. But let me tell you, when inflation rages, and it goes up as it is under this hopeless treasurer, people pay more taxes as a proportion of their income,” he said.
Taylor said he had always advocated for lower taxes. Columnist for this masthead, Nikki Savva, has reported Taylor and Hume had wanted to offer their own tax cut as a contrast to the surprise $5 a week tax cut Albanese revealed in the March budget last year. But Dutton, according to Savva, was not interested in Taylor’s plan to offer a tax-back guarantee for those forced into a higher tax bracket by inflation.
Taylor also denied he’d worked to undermine Ley when he was on her frontbench.
“I sought to be a supporter of her leadership every single day,” Taylor told Sky News. “We got to a point… where the view of the party room (was that) there needs to be a reset.”
While Taylor and Hume were on Sunday reluctant to detail policy so soon after taking control of the party, Hume said they would oppose any plan to reducing the capital gains tax discount – something neither Treasurer Jim Chalmers and Prime Minister Anthony Albanese have denied.
This masthead revealed the government is considering a cut in the CGT concession as part of a broader tax reform package aimed at helping younger Australians to buy their own home.
“That discussion has been had in the party room for some months,” Hume said. “Whether it be changes to negative gearing, whether it be changes to capital gains tax… Liberals know instinctively, when we talk to each other, that we are a party of lower taxes, and that if you tax something, there is less of it.”
“If you tax residential housing, there will be less of it. That would be a disaster. No one has yet come out and demonstrated that a wholesale change to capital gains tax on residential housing will create more houses or provide more rental opportunities for rental houses for those that are yet to purchase their first home.”
Hume would not commit to any specific tax reforms but conceded “more of the same clearly isn’t good enough”.
“I’m not making policy on the run on Sunday morning, 48 hours after I’ve become deputy leader,” she said. “Angus Taylor and I instinctively will always say lower taxes are better than higher taxes, and they’re better for all Australians.”
Hume, who will get to choose her portfolio, foreshadowed an economic role.
“I am particularly interested in making sure that I have an opportunity to talk about what’s important to me, which is making sure that we have a far more productive economy,” she said.
Albanese attacked the new Coalition lineup during a press conference on Sunday, saying his government would in July deliver the $5 a week tax cut they promised in the last election and one next year, “after Angus Taylor led the charge to not only suppose but to say that he would legislate, if he hadn’t been elected treasurer in the election less than a year ago, that he would legislate to actually increase the taxes for all 14 million Australians”.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.
Brittany Busch is a federal politics reporter for The Age and Sydney Morning Herald.Connect via email.