The Prime Minister addressed the National Press Club on Thursday to unveil his plan to slash the tax cuts for higher income earners in favour of bigger breaks for those earning under $150,000.

“For me, our responsibility is clear. This is the right decision, not the easy decision,” he said.

Over the summer, senior Treasury and Finance officials were tasked to canvas options for providing cost-of-living relief for Australians.

Treasury advice, released at the same time the Prime Minister began his address, said that when stage three was first legislated by the Coalition in 2019 the Australian economy was expected to be supported by a “positive global outlook, with strong, broadbased global growth”.

“Inflation, and therefore interest rates, were expected to remain low,” the advice said.

However, the pandemic, damaged supply chains, conflict in the Middle East and in Europe, as well as rapid increases to the price of food and energy, has resulted in the economic forecast not coming to pass.

Mr Albanese said if he was to proceed with the old plan, middle Australia would miss out on the “help they need and they deserve”.

“Because when I see the pressure Australians are under right now, it’s crystal clear to me that every taxpayer needs and deserves a meaningful tax cut,” he said.

Under the changes rubber stamped by caucus on Wednesday, the reworked cuts will lower the tax rate on incomes up to $45,000 to 16 per cent – down from 19 per cent – and lower the $45,000 to $135,000 tax bracket to 30 per cent – down from 32.5 per cent.

Additionally, the 37 per cent tax bracket will be retained between $135,000 and $190,000, above which the top marginal tax rate will then kick in at a 45 per cent rate.

The changes will neuter the third stage of the Morrison government’s tax package – designed to address bracket creep – which would have abolished the 37 per cent tax bracket on income earned between $120,000 and $180,000.

Instead, a 30 per cent tax rate would have applied to all earnings between $45,000 and $200,000, with a 45 per cent rate on all earnings above this level.

As a result of Labor’s tax package, roughly one million taxpayers who earn in excess of $150,000 a year will be up to $4546 worse off than they otherwise would have been.

However, the overwhelming majority of taxpayers are set to be better off with all income earners between $45,000 and $135,000 receiving an extra $840 under the Albanese government’s policy.

Mr Albanese argued by making the hard choices in the government’s past two budgets, and delivering the first budget surplus in 15 years, there was now wiggle room to remodel the tax breaks.

The Coalition – which legislated the tax cuts in 2019 while in government with the support of Labor – has used days of speculation in the lead up to the address to accuse Mr Albanese of breaking a promise.

Deputy Liberal leader Sussan Ley initially suggested the Coalition would repeal the cuts if it were to win the next election, but walked it back on Thursday morning.

Mr Albanese said the response was “predictable” and nothing but “confected outrage”.

“That’s how far down the rabbit hole they’ve gone. They would rather stage a political brawl, than help low and middle income earners,” he said.

The government also announced an increase to the low income threshold at which the Medicare levy applies, meaning 1.2 million low-income earners will either remain exempt from paying the levy, or will pay less in tax.

PROTESTERS GATHER OUTSIDE NATIONAL PRESS CLUB

As the Prime Minister was attempting to sell his reform, protesters who gathered out the front of National Press Club tried to drown him out.

There were two groups who gathered outside of the NPC venue in Canberra – those calling for an end to coal and gas and pro-Palestine supporters.

While they weren’t allowed inside the room, at one point during Mr Albanese’s speech had pointed in the right direction outside the building and were able to get the sounds of their chants in the room — albeit if quiet muffled.

It didn’t distract Mr Albanese, however, as he continued on with his address.

BOMBSHELL PROBE INTO SUPERMARKET PRICES

The Albanese government will instruct the competition watchdog to scrutinise the supermarket industry amid accusations ofprice gouging.

The 12-month probe, which will conducted by the Australian Competition and Consumer Consumer Commission (ACCC), will examinewhether supermarkets have used their market power to expand their profits, and pressure consumers, farmers and suppliers tobolster their bottom line.

Woolworths, the nation’s largest supermarket chain, together with its main competitor Coles, make up two-thirds of Australia’sfood and grocery market.

Both companies have regularly defended their pricing, claiming they too are affected by cost pressures from suppliers andtheir workforce.

The changes were announced alongside a broader cost of living relief package, which included an overhaul of the contentiousstage three tax cuts, by Prime Minister Anthony Albanese at an address to the National Press Club on Thursday.

“The ACCC has significant powers – and it is the best and most effective body to investigate supermarket prices,” Mr Albanesesaid in his first major address of 2024.

The supermarket industry will also be subject to a Greens-led parliamentary inquiry, as pressure grows on the sector whichhas recorded near-record profits, while consumers struggle amid the ongoing inflation crunch.

Mr Albanese said the inquiry will investigate online shopping, loyalty programs and how technological change has affectedcompetition in the industry.

Amid accusations that lower prices paid by retailers at the farm gate aren’t flowing through to final prices, the ACCC willalso be directed to scrutinise whether consumers and primary producers are receiving a fair deal.

“When farmers are selling their product for less, supermarkets should charge Australians less,” Mr Albanese.

Under Australian consumer law, high grocery prices are only prohibited by competition law when there is unlawful communicationbetween the parties to co-ordinate pricing.

The government also unveiled funding for consumer advocacy organisation, CHOICE to provide clear and regular information onprices in Australian supermarket outlets.

“Across thousands of products it can be hard for people to find the best deal,” Mr Albanese said, adding that the fundingwould promote “transparency, enhance competition and drive value.”