New claim Aussies face $300b tax hike

·4-min read
Australia's Parliament Holds First Sitting For 2023
Shadow treasurer Angus Taylor has addressed the National Press Club in Canberra. Picture: Martin Ollman/Getty Images

Angus Taylor has declared inflation is now being caused by decision-making in Canberra rather than Russia’s invasion of Ukraine as he laid the blame for the cost of living crisis on the federal government.

Mr Taylor said took aim at what he called Labor’s “big spending” approach as he responded to the Albanese government’s second budget in his address to the National Press Club in Canberra on Wednesday.

Speaking just over a week after Treasurer Jim Chalmers unveiled this year’s federal budget, Mr Taylor claimed Australians would pay more than $300bn in tax over the next five years under Labor.

Mr Taylor said the Coalition had made it clear it would not have delivered the same budget, which he said at best failed to address inflation and at worse added “fuel to the fire”.

“No one wins from a big spending government in an inflation crisis,” he said.

Mr Taylor also sought to shift the blame for Australia’s ongoing inflation problem onto the Albanese government rather than unavoidable global factors such as Russia’s invasion of Ukraine, which wreaked havoc on international supply chains and energy markets.

“Inflation is coming from Canberra now, not from the Kremlin, and so it’s Canberra’s problem to solve,” he said.

“Our priority would be to bring down inflation and set up Australia up for growth in the medium-term through lower taxes and productivity enhancing policies.”

These comments come in stark contrast to Treasurer Jim Chalmers’ routine framing of global economic “headwinds” as having an unavoidable impact on Australia’s economic position and correlating government fiscal policy.

Angus Taylor has declared inflation is now being caused by decision-making in Canberra rather than Russia’s invasion of Ukraine. Picture: NCA NewsWire / Martin Ollman

However, former prime minister Scott Morrison also blamed factors outside his control such as the war in Ukraine as inflation began to rise in earnest during his final months in government, saying before the election there was no “magic wand” to bring down the cost of living.

Asked on Wednesday how inflation had been outside of the Coalition’s control but could now apparently be controlled by Labor, given the conflict in eastern Europe was ongoing, Mr Taylor appeared to give a contradictory response.

“Well, the key to answering that question is that we’re not in government, Labor is now,” he said.

“So, it’s within their control and it’s not within ours.”

Mr Taylor acknowledged the inflation crisis had been spurred in large part due to rising energy costs caused when Russia invaded Ukraine in February 2022 but claimed Labor had made the problem worse.

“When you want to get prices of something down, you’ve got to get more supply in,” he said.

“Now, more broadly, what we’ve seen over time is prices have increased for absolutely everything, right across the board. It’s not just one particular sector, it’s absolutely everything.

“And that’s why now it’s very clear that if you want to deal with it, you’ve actually got to deal with it from Canberra. Fiscal policy has to play a role.”

Mr Taylor says Labor needs to do more to tame inflation. Picture: NCA NewsWire / Martin Ollman

Mr Taylor also used his National Press Club address to signal bipartisan support for the making the National Disability Insurance Scheme financially sustainable.

“We have again reiterated our support for ensuring the NDIS is sustainable into the future. As we did with the RBA review – I think very well – this is something that we are prepared to work with the government to achieve,” he said.

“The NDIS is too important – securing its future should be above politics.”

Treasurer Jim Chalmers has insisted the budget will drive down inflation and defended splashing $21bn amid debate among some economists over whether the measures will make cost of living worse and tempt the Reserve Bank to further raise interest rates.

A $14.6bn cost of living package was announced to cover energy bill subsidies, as well as an increase to commonwealth rent assistance, bulk billing incentives and an expansion of income support for students and people out of work.

The budget has forecasted total payments from the commonwealth sector to go up by 3.7 per cent in real terms over the coming financial year.

In his own Press Club address last week, Dr Chalmers said he was “supremely confident” the budget would relieve the strain on Australians without adding to inflation.

Dr Chalmers has also promised the budget — including Labor’s energy subsidies — will shave 0.75 per cent off the inflation rate over the 2023-2024 financial year.

The budget forecasts inflation to slow from 7 per cent in the March quarter to 6 per cent for the April-June period and down to 3.25 per cent by June 2024.