The cost of the stage three tax cuts has blown out to $254 billion over 10 years, Treasurer Jim Chalmers has said.
Subscribe now for unlimited access.
or signup to continue reading
Dr Chalmers' revelation is set to reignite calls for the contentious policy to be dumped or amended.
The cost of the legislated tax cuts, which aren't due to start until July 2024, was estimated to cost $243 billion over the course of the decade, according to Parliamentary Budget Office figures.
But Dr Chalmers has revealed the hit to the budget is expected to be higher than that.
"The last time we had a look at it, I think we were expecting that equivalent 10-year cost to be around $254 billion," he told ABC's RN Breakfast.
Asked if he was alarmed by the blowout, the Treasurer said it was "pretty clear to everyone" that the tax cuts would hurt the budget.
READ MORE:
The former Coalition government's tax cut package, which passed with Labor's support in 2019, includes three components.
It would scrap the 37 per cent income tax bracket, the 32.5 per cent bracket would drop to 30 per cent and the threshold for the top rung would rise from $180,000 to $200,000.
The Greens, teal independents, economists, unions and others have been urging the Albanese government to dump or amend the tax cut package, arguing the quarter of a trillion dollars could be better spent elsewhere given the state of the federal budget.
Labor flirted with the idea of making some changes, which would have seen it break an election promise to keep the tax cuts.
ACT senator David Pocock, who has been calling for a re-think of the package, said it made "no sense" to be handing billions of dollars in tax breaks to high-income earners at the same time as Australians were living in poverty.
"One in six kids are now living below the poverty line in Australia," he told ABC's RN Breakfast.
"It is unacceptable for such a wealthy country to have that happening.
"At the same time we've got a government talking about how tight the budget is, and yet at the same time they're not willing to even talk about whether or not they're going to scrap $254 billion in legislated tax cuts."
More to come.
