The Morrison government is giving no ground to Labor on its promised tax cuts, leaving the opposition to mull whether it should stay the course with its stance on the $158 billion package.
The coalition needs the support of Labor or the votes of four of the six Senate crossbenchers to get its three-stage package through the upper house when parliament returns next week.
Labor backs stage one and wants to bring stage two forward but is not supporting the final stage, which flattens the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.
The government has flatly rejected splitting up the package.
Labor Senator Louise Pratt said it would be up to the opposition’s caucus next week to collectively decide on a course of action.
But she would be willing to vote against the full package.
“I would be saying that that’s what we should be prepared to do,” she told ABC TV on Thursday.
She stressed the government could deliver Australians tax relief if it comes to the negotiating table.
“The ball is really in the court of the government as to whether it’s prepared to come to the party. I don’t think we have to budge.”
Finance Minister Mathias Cormann said the final stage of the coalition’s plan would “take the bracket-creep monkey off all Australian workers”.
On the crossbench, Senator Cory Bernardi, a former Liberal, is the only person to have thrown his support behind the full tax package so far.
Centre Alliance, which controls two votes, is yet to declare its hand.
It has been negotiating with the government on measures to reduce gas prices to ensure the extra cash some Australians get won’t be chewed up by rising power bills.
One Nation, which holds two seats, has vowed not to support it, as have the Greens, who control nine votes.
Senator Jacqui Lambie hasn’t made a call either way.
The first stage of the plan will mean extra cash for low and middle-income earners in coming months.
Labor will only support the second stage, due to kick in from 2022/23, if the government brings it forward to the coming financial year.
This stage will top-up a low income tax offset and mean more people – earning up to $45,000 instead of $41,000 – will get a 19 per cent tax rate.