Senator the Hon Mathias Cormann

Today the Abbott Government is introducing Labor 2013-14 Budget Savings (Measures No. 1) Bill 2014, to implement the savings that Labor announced and booked but never legislated.

Labor announced, in their final Budget, that these personal income tax changes would be deferred as they were meant to compensate for an increase in the carbon price, which was not expected to occur until 2018-19 due to a revision to their carbon price forecast.

At the time, Labor booked $1.5 billion in savings over the then forward estimates period to the Budget bottom line, but did not seek to introduce legislation to reverse the personal income tax changes which they had legislated.

The cost to the Budget if this Bill does not pass is now $2.2 billion over the forward estimates to 2017-18.

The Coalition has always been clear that we would support this Labor saving, which removes the second round of personal income tax changes which are due to commence on 1 July 2015.

A first round of tax cuts to compensate for the introduction of the carbon tax has already been delivered to honour an election commitment. The Government is keeping the current carbon tax related personal income tax thresholds and the fortnightly pension and benefit increases.

Labor should now support their own Budget measure, and if they do not, they must immediately outline how they intend to fund their own budget black hole while they are opposing $40 billion in Budget savings.