Albanese govt to introduce tax plan in Parliament this week

The Albanese government will put its overhaul of the stage three tax cuts to the test this week, as parliamentarians return to Canberra for the first sitting week of the year.

Treasurer Jim Chalmers will introduce the legislation for the government's proposed overhaul of the tax cuts in the House of Representatives on Tuesday.

The Prime Minister unveiled the plans in January, after days of speculation, as his government sought to wrest back control of the cost of living narrative from the Coalition.

It means breaking an election promise to uphold the former Coalition government's stage three tax cuts, which the Prime Minister has defended as "choosing a better way forward given the changed circumstances".

The Albanese government's plan would offer a greater tax cut to everyone earning less than $146,486, than the planned stage three tax cuts.

Treasury estimated it will provide cost-of-living relief to 13.6 million taxpayers, compared to 10.8 million taxpayers, as per the stage three plan. It has also predicted the redesign will not fuel inflation.

On Sunday, Mr Albanese said he wanted to see the legislation passed "as soon as possible", but preferably before April.

"We will be able to give consideration in the House of Representatives in the next two weeks and the Senate will return after just a one-week break and be able to consider the legislation," the Prime Minister said on the ABC's Insiders program.

"This is legislation which people see, which will give every taxpayer a tax cut.

"And it should receive the support of every parliamentarian."

Opposition Leader Peter Dutton is yet to announce whether the Coalition will support the legislation, but has sharply criticised the Prime Minister for the broken election promise, and the timing of the backflip.

While Mr Albanese and the Treasurer have maintained economic circumstances have changed and so, too, have their plans, Coalition politicians have pointed to an upcoming byelection in Dunkley in March as a key factor.

"Obviously, the Prime Minister has been desperately worried about the outcome of the Dunkley byelection, which is due on the 2nd of March," Mr Dutton told Nine's Today Show on Friday.

"So, a lot of it's driven by politics for the PM, and I just don't think you can believe anything he says."

The Coalition will have a chance to make itself heard on Monday, when Treasury and Finance officials appear before the Select Committee on Cost of Living, chaired by the opposition's spokesperson for finance, Jane Hume.

Senator Hume will grill officials over the timing of the advice - which is understood to have been requested around Christmas 2023, delivered to cabinet on January 22 - and the motivation behind it.

The government will also introduce legislation to increase the the low income threshold for the Medicare levy, while debate on the Paid Parental Leave Amendment Bill will resume in the lower house.

The amendment would increase the maximum paid leave entitlement to 26 weeks in 2026. Currently it is 20 weeks, but the government plans to increase it by two weeks per year from July 2024.