Ahead of federal parliament resuming on Monday, Labor says it will negotiate with the coalition to deliver personal income tax cuts for low-income earners.
However, the Turnbull government insists it wants the full package of tax cuts passed in the coming fortnight of sittings.
Labor frontbencher Brendan O’Connor says the opposition is keen to deliver tax relief for working people and has a plan that would almost double the relief being offered by the government.
‘We’ll negotiate with the government,’ he says.
‘We’ll support their first tranche (of cuts) but we are focused on what relief can be provided now, not seven years in the never-never world, which quite frankly is dishonest and delusional.’
Finance Minister Mathias Cormann, who leads negotiations for the government in the Senate, says the package should be passed as a whole to deliver the biggest benefit to workers and the economy.
The coalition appears to be one vote short of the eight it needs to get the package through the Senate.
It is understood senators David Leyonhjelm, Cory Bernardi, Fraser Anning and Derryn Hinch are supportive of the package as it stands.
Former One Nation senator Brian Burston is also expected to endorse it, having left Pauline Hanson’s party on Thursday.
The two Centre Alliance senators, Rex Patrick and Stirling Griff, could also be on the government’s side, but have said they are inclined to only support the first part of the plan.
However, independent Tim Storer and senators Hanson and Georgiou want the package split.
The cuts from July 1 would see a low and middle-income tax cut offset introduced – worth up to $530 for individuals – and the 32.5 per cent threshold increased from $87,000 to $90,000.
The biggest concern of opponents of the whole package is the tax cut pencilled in for 2024.
Stage three of the plan would increase the top 45 per cent tax rate threshold from $180,000 to $200,000 while abolishing the 37 per cent tax rate, leaving all taxpayers earning between $41,000 and $200,000 on a rate of 32.5 per cent.