Opposition Leader Peter Dutton has announced a major election promise to deliver one-off $1,200 tax cuts for Australians earning up to $144,000 a year.
The $10 billion policy sets the stage for an election fight over tax breaks, after the Albanese government legislated tax cuts of about $5 per week, starting from July 2026.
The proposed cut has been designed to deliver cost-of-living relief to middle-income earners amid continued pressure from rising bills, interest rates and inflation.
“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,” Mr Dutton said in a statement.
“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.
“The Coalition is stepping up with a plan that provides real help.”
The announcement marks a significant shift in the opposition’s campaign strategy after earlier commitments focused on fuel price relief.
Mr Dutton and the Coalition promised in the budget reply to cut the fuel excise from 50.8 cents to 25.4 cents per litre on petrol and diesel for 12 months, saving some households $1,500 per year.
Shadow treasurer Angus Taylor also revealed the opposition would repeal Labor’s legislated tax cuts if it was elected, describing them as an “election bribe”.
However, the new tax policy adds a second pillar to the cost-of-living platform and escalates the fight over who can better support households through tough economic conditions.
Deputy Prime Minister Richard Marles told Sky News Sunday Agenda this policy would not provide immediate relief, despite the fact Labor’s own tax cuts don’t take effect until July 2026.
“I think Australians would have a right to feel a sense of cynicism about this policy,” he said.
“Particularly in light of the position that the Coalition took in relation to our tax cuts that we announced during the budget.
“They’re doing $10 billion (in tax cuts) over 15 months, and there is no explanation as to how they’re paying for it… What Australians know is that how they’ll pay for it, is through massive cuts to frontline services.”
In response, shadow home affairs minister James Paterson pointed to the immediate benefit from the fuel excise cut.
“I nearly fell off my chair when I heard Richard Marles criticise our tax offset, a cost of living tax cut, on the basis that it wasn’t going to arrive soon enough,” he said.
“First of all, people are going to get a benefit from day one of the Dutton Coalition government.
“But it was an extraordinary claim from a guy who’s offering 70 cents a day in 15 months’ time.”
Mr Dutton and the Coalition have since trailed Mr Albanese and the Labor Party in the latest polling, at 48-52 on a two-party preferred basis.
Voting opens on Tuesday ahead of the May 3 election.
