Coalition Tax Plan Costs Higher Than Initially Claimed, Analysis Shows

An analysis by the ABC reveals that the Australian Coalition's proposal to index tax brackets to inflation could cost significantly more than previously stated. While opposition leader Angus Taylor cited a figure around $20-23 billion for the first four years, the Parliamentary Budget Office's SMART model indicates the true cost is approximately $35.3 billion. This discrepancy stems from timing assumptions in different costing tools, with the more accurate SMART model accounting for immediate pay-as-you-go adjustments rather than end-of-year refunds. The policy, aimed at eliminating bracket creep, is projected to cost $44.5 billion annually by 2035-36 and $167 billion over eight years. This higher initial cost presents a challenge for the Coalition, which must identify substantial spending cuts to offset the budget impact before the next election. Deputy Liberal Leader Jane Hume had previously claimed the policy was fully costed, but sources indicate no formal PBO costing occurred prior to the announcement. The debate highlights contrasting fiscal visions between the Labor government and the Liberal-National Coalition ahead of future elections.