FILE PHOTO: Australian Treasurer Jim Chalmers arrives to attend a G20 finance ministers' and Central Bank governors' meeting at Gandhinagar, India, July 18, 2023. REUTERS/Amit Dave/File Photo
SYDNEY (Reuters) - Australia's centre-left Labor government on Thursday defended proposed tax rule changes that would trim benefits to the wealthy while giving low-income earners more breaks, in a bid to win back voters battling higher costs.
The government has reached a "different view" about the already-legislated tax cuts, Treasurer Jim Chalmers said, as the conservative opposition coalition criticised the government for breaking an election pledge of retaining the tax cuts.
Chalmers said the tax policy shift would help build trust as it was designed to provide more cost-of-living relief for more people without stoking inflation.
"You build trust by making the right decisions for the right reasons in the interests of the people and you do that even when it's politically contentious and politically difficult as this is," Chalmers told Channel Nine.
Under the new policy, people earning up to A$140,000 ($92,050) will enjoy lower taxes from July 1, Australian media reported. A 37% tax band would be retained for some high earners, with the savings redirected to those on low incomes.
"Every Australian taxpayer will get a tax cut," Prime Minister Anthony Albanese said in a statement ahead of his speech at the National Press Club later on Thursday, when he is expected to disclose full details of his government's tax plans.
Australian households are under broad financial pressure from high inflation, which spiked as high as 7.8% in December 2022, before slowing to 5.4% in the third quarter.
That has dented Albanese's ratings since his 2022 election win. Two polls out last month showed his disapproval ratings outstripped his approval numbers.
The opposition said Albanese must apologise to Australians for reneging on his election promise.
"They promised on more than 100 occasions that Australians would have the tax cuts delivered as they were legislated, which the Labor Party voted for when they were put to the Parliament," Shadow Home Affairs Minister James Paterson told Sky News.
($1 = 1.5209 Australian dollars)
(Reporting by Renju Jose in Sydney; Editing by Richard Chang)
