Anthony Albanese reportedly looking to overhaul Stage 3 tax cuts to provide cost-of-living relief

The Stage 3 tax cuts could be redesigned as part of a major policy shift from the Albanese Government to address the cost-of-living crisis.

In a bombshell move which would expose Labor to accusations of breaking a key election promise, the Government is reportedly weighing up an overhaul of the controversial tax package as it meets for emergency talks in Canberra.

Raising the tax-free threshold and keeping the top marginal tax bracket at $180,000 – rather than raising it to $200,000 - are under consideration, according to Sydney’s 2GB.

The change would mean lower-income earners get more relief than promised while those earning above $180,000 would see their promised tax cut reduced.

The speculation came after Mr Albanese summoned Labor MPs to Canberra this week to debate options to ease the financial pain on families without fuelling inflation.

The West Australian understands cabinet is scheduled to meet on Tuesday before caucus gathers on Wednesday.

The prime minister will address the National Press Club the following day, raising expectations of a major announcement.

Redesigning the Stage 3 tax cuts would be a major political gamble for Mr Albanese, who went to the election promising to deliver a package that was legislated under Scott Morrison’s Government in 2019.

Mr Albanese has resisted pressure to dump the plan and spend the money elsewhere, repeatedly stating that the Government’s position had not changed.

Earlier this month Mr Albanese promised that “tax cuts will happen in July”.

Asked if those would be in the form Labor had committed to, he said: “we’re committed to that”.

The reports came after Mr Albanese on Monday hinted the next tranche of cost-of-living relief would be targeted at low and middle-income households.

In an interview with Sky News, Mr Albanese confirmed advice from Treasury and Finance on various policy options would be finalised by the time MPs gathered in Parliament House on Wednesday.

He singled out low and middle-income earners as one cohort the Government was particularly keen to help.

“We’ll always look for ways in which we can provide assistance to people … particularly people who are on low and middle incomes are the ones doing it particularly tough,” he said.

Mr Albanese said the Government had always been “responsible” in its design of cost of relief, citing its policies on energy, medicines, childcare and TAFE as examples of how it was offering help while also taming inflation.

The opposition has criticised Mr Albanese for summoning his colleagues to Canberra for a one-off meeting, with one estimate putting the cost to taxpayers at almost $500,000.

The sum includes the cost for all Labor politicians based outside the ACT to travel to the nation’s capital with a staff member and stay overnight Wednesday.

“This government has had 18 months to deal with these issues and Albanese decides in the dying days of summer to pull all Labor MPs back to Canberra at significant expense,” NSW Senator Dave Sharma said.

Mr Albanese described the criticism as “nonsense”, pointing out this cabinet colleagues were already in Canberra this week for routine meetings.

Earlier, Agriculture Minister Murray Watt said the meeting would be “money well spent” to get cost of living relief out the door to families.

“I think it’s a really positive sign that the government wants to get out there early in the year, discuss what more can be done about cost-of-living relief, and potentially have more things to announce after that,” he said.