Dutton to offer targeted income tax offset of up to $1,200

Peter Dutton at his party launch on Sunday will offer a “cost of living tax offset” of up to A$1,200 to more than 10 million taxpayers.

The one-off offset would go to taxpayers earning up to $144,000 when they lodged their tax return for next financial year, making it more than a year off.

The full offset would be available to those earning between $48,000 and $104,000 a year. About 85% of taxpayers would benefit from the offset and about half of all taxpayers would receive the maximum offset.

The tax offer, costing $10 billion, compares with the government’s tax cuts – announced in the budget and legislated that week – that phase in starting mid next year and cost $17 billion over the forward estimates.

The Coalition’s tax announcement comes as something of a surprise. The opposition had given the impression it believed tax cuts unaffordable.

There was some disquiet in Coalition ranks at the decision to oppose the government’s tax cuts, and concern about the opposition going to the election with no promise for income tax relief.

Dutton has returned to a former Coalition policy. The Morrison government introduced a low and middle income tax offset in the 2018-19 tax year. It was subsequently extended but then abolished by the Labor government.

Dutton said the temporary and targeted offset would provide support for families while a Coalition government addressed the underlying economic problems.

“Australians are hurting,” Dutton said.

He said people needed help now.

“A Coalition government will first provide help to families by cutting fuel by 25 cents a litre - a saving of about $1,500 a year for a two car family. And then by giving back up to $2,400 per family whilst we clean up Labor’s mess. Labor’s 70 cents a day is a bandaid on a bullet wound.

"Our Cost of Living Tax Offset will put more money back into the pockets of millions of Australians at a time when they’re being crushed by skyrocketing grocery bills, rent, mortgage repayments and insurance costs.”

He said “Labor’s "so-called tax cut – just 70 cents a day – is a slap in the face to hard working Australians and an insult to families trying to make ends meet”.

“It shows just how out of touch Mr Albanese really is.”

Shadow Treasurer Angus Taylor said the Coalition’s tax relief was responsible, temporary and targeted.

“Labor’s big spending agenda is fueling inflation and driving up the cost of everything.

"This offset is part of our comprehensive plan to rebuild the economy, ease cost of living pressures, and reward hard work.”

The Liberal launch is in Sydney.