$40 Million of Taxpayer-Backed Ad Spend Planned for Selling Labor’s Tax Cuts

Finance Minister Katy Gallagher says while the decision has been made, it hasn’t been finalised because a campaign was not yet in place.

Australia's federal Parliament in Canberra, Australia, on Feb. 8, 2024. Melanie Sun/The Epoch Times

The Albanese Labor government is planning to spend $40 million (US$26 million) of public funds on an advertising campaign to sell tax cuts.

The new tax cut plan passed the lower house of Parliament on Feb. 15, with support of the Coalition despite concerns of a broken promise.

In Senate estimates, Finance Minister Katy Gallagher confirmed government has made a decision on the multi-million advertising campaign but said it wasn’t finalised.

“The decision of government is to agree to a campaign of up to $40 million over two financial years in relation to the tax campaign,” Ms. Gallagher said on Feb. 14.

“But that hasn’t been finalised. You know, so, because we haven’t got a campaign in place and it hasn’t been approved and so, we’ve made a provision.

In response, Shadow Treasurer Angus Taylor said this was “another example of a government that thinks it can spin and spend its way out of a cost of living crisis.”

“The government’s broken promise will see four million people worse off in the next 10 years, and cost Australians an extra $28 billion in taxes,” he said.

“After spending $450 million on a failed referendum and adding $209 billion of extra spending, this government is spending $40 million on an advertising campaign for their lie to the Australian people.”

The Albanese government tax cuts renege on an election promise to abolish the 37 percent tax rate for those earning between $120,000 and $180,000 a year. These changes were legislated by the previous Morrison government.

Shadow Finance Minister Jane Hume said, “The Albanese Government has questions to answer, including whether this campaign will run during the Dunkley by-election.”

The new 2024 tax plan cuts involve lowering the 19 percent tax rate to 16 percent for income between $18,200 and $45,000.

Further, it reduces the 32.5 percent tax rate to 30 percent for incomes between $45,000 and $135,000 and lifts the 37 percent tax rate threshold to $135,000. In addition, it lifts the 45 percent tax threshold from $180,000 to $190,000.

Tax Cuts Legislation Passes Lower House

The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 (pdf) passed the lower house of Parliament on Feb. 15, with support of the Coalition and cross bench.

The Coalition attempted to rename the bill to include the phrases “broken promise” and “entrenching bracket creep.”

Prime Minister Anthony Albanese hailed the passage of the bill as a “great day” providing tax cuts for millions of Australians.

“This is indeed a great day, it is a great day on so many levels, this is a day in which every Australian will get a tax cut, all 13.6 million of them,” he told Parliament.

“We want people to earn more and we want workers, every taxpayer, to keep more of what they earn.”

But Liberal National parliamentarian Bert van Manen raised concerns that the bill will not be able to deal with the cost of living crisis in Australia.

“We’re seeing nothing in this bill that will deal with the cost of living, $15 a week is not going to scratch the surface when people are at a minimum of $150 a week worse off,” he said in quotes cited by AAP.

Treasurer Jim Chalmers said the tax cuts passed today were a combination of relief and reform and responsibility.

“More relief for middle Australia, better reform for our economy, and consistent with the responsible approach that we have taken to managing the budget and also managing the economy more broadly.

Australian Treasurer Jim Chalmers hands down the 2023 Budget in Canberra, Australia, on May 9, 2023. Martin Ollman/Getty Images

“It became increasingly clear to us over the course of summer that the tax system and particularly the stage three tax cuts were the most effective way to provide more cost of living relief to more people without adding to inflation.

“We reject the approach taken by the opposition who say that the only way to prosper as a country is for the Australian people to work longer and for less pay,” he said.

Speaking on 2GB radio on Feb. 15, Mr. Taylor said the Opposition did not have a problem with lower taxes, but with the way it was being funded.

Shadow Treasurer Angus Taylor speaks to the media during a press conference in Sydney, Australia, on July 4, 2023. AAP Image/Bianca De Marchi

“It’s being funded by Australians—it'll be four million over the coming years who’ve got to pay for Albo’s broken promise. And he knows people hate broken promises. So he’s going to spend $40 million trying to explain it to people,” Mr. Taylor said.

“Well, this is now becoming a long list of initiatives they’ve taken that are wasting taxpayers’ money, hard earned money.

“I know how hard small businesses and employees out there working to earn their income and pay their taxes. We’ve seen $450 million on a failed referendum. We’ve seen $209 billion of extra spending. That’s $20,000 for every household since Labor came to power.”

 AAP contributed to this report