Australia PM vows to introduce bill to reshape tax cuts within weeks

FILE PHOTO: Australian Prime Minister Anthony Albanese speaks to the media at Downing Street in London, Britain May 5, 2023. REUTERS/Maja Smiejkowska

SYDNEY (Reuters) – Australia’s Prime Minister Anthony Albanese said on Saturday his centre-left government would soon legislate changes to planned tax cuts set to trim benefits to the wealthy while giving low-income earners more breaks, as many Australians battle higher living costs.

“We’ll introduce the legislation in coming weeks when parliament resumes,” Albanese told reporters in the New South Wales town of Orange. Federal parliament resumes on Feb. 6.

Under the new policy, announced this week, people earning up to A$135,000 ($88,763) will fall into lower tax brackets from July 1. Tax breaks for some high-income earners will nearly halve, with the savings redirected to those on low incomes.

Australian households are under broad financial pressure from high inflation, which rose to 7.8% in December 2022, before easing to 5.4% in the third quarter of 2023.

The changes represented “cost of living support to middle class working families without putting pressure on inflation”, Albanese told Saturday’s press conference.

The Albanese-led Labor government in May 2023 announced A$23 billion in targeted cost-of-living relief, and had been under pressure to provide more relief in the lead up to unveiling the reshaped policy.

The shift comes amid a dip in support for Albanese, elected to office in 2022, with two polls last month showing his disapproval ratings outstripped his approval numbers.

The political opposition says Albanese has wrecked his credibility for breaking an election pledge not to modify the tax policy, legislated by the previous government in 2019.

(Reporting by Sam McKeith in Sydney; Editing by Kim Coghill)