Anthony Albanese’s Stage 3 tax cut overhaul to deliver more to Australians earning up to $150K while higher earners lose out

Australians earning up to $150,000 are set to receive bigger tax cuts while those on higher incomes are set to lose out under the Prime Minister’s controversial tax plan already being slammed by business bodies and Opposition MPs as a broken election promise.

Anthony Albanese said he will take the proposed changes to a Labor caucus meeting on Wednesday and provide details at the National Press Club on Thursday.

“This afternoon is focused, really concentrating on middle Australia and that’s the advice that we’ve received from Treasury,” Mr Albanese told reporters in Canberra on Wednesday morning.

People earning up to $150,000 are expected to receive bigger tax cuts under the controversial plan while those on higher salaries will receive more modest returns, the Sydney Morning Herald reported.

Under the stage three tax cuts, the 37 per cent marginal tax rate will be scrapped for those earning more than $120,000 a year.

The 32.5 per cent tax rate will be lowered to 30 per cent for workers earning between $45,000 and $200,000.

Mr Albanese on Tuesday said he supported tax cuts, and everyone would receive one.

There are concerns within the government that any change to the controversial tax cuts would amount to a broken election promise.

The government has consistently pledged it remained committed to implementing the tax cuts in full.

Opposition spokesman for foreign affairs Simon Birmingham has called the tax rethink a “significant broken promise” and said it did not address bracket creep.

“What Anthony Albanese and Jim Chalmers will be doing is possibly giving some people a little bit more today, but many of those people will be pushed up into those higher tax brackets tomorrow and in the years ahead,” he told ABC radio on Wednesday.

“(The changes are) dressed up as a short term giveaway, but with long term consequences of the government relying on even more income tax.”

Australia’s largest business groups are urging Labor “to stick to its promise” of not amending them.

In a joint statement, the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and the Minerals Council of Australia said “tinkering at the edges would mean a promise has been broken”.

“Our tax base is eroding and with an unhealthy reliance on taxing incomes as well as a raft of inefficient taxes, especially at state and territory level, we are increasingly ill-equipped to meet our society’s needs,” the statement read.

“Fixing this mess requires not only political will and co-operation from across the federation - it will require public confidence that a program of reforms will be delivered as promised.”

Meanwhile Greens senator Nick McKim said the reported changes likely would not go far enough.

“As it’s currently cast, (it’s not) the panacea that it’s made out to be for low and middle income Australians, who will continue to struggle and I very much doubt that whatever tweaks Mr Albanese makes are going to make very much difference to them,” he told ABC news on Wednesday.

Welfare advocacy groups have slammed the tax cuts as benefiting those at the top end of town while people on lower incomes struggle to manage a cost of living crisis.

Critics also claim the tax relief will be inflationary.

Opposition treasury spokesman Angus Taylor has described any move away from the full tax cuts as being the “mother of all broken promises”.

He said after weeks of “weasel words and word games” the prime minister could not be trusted.