Tom Iggulden reported this story on Friday, February 19, 2016 12:05:00

KIM LANDERS: The Federal Government is again on the back foot with its economic message, insisting it has not changed its mind about trying to offer income tax cuts.



Already reeling from attacks on its economic leadership credentials after a decision not to raise the GST, the Treasurer is insisting that the Government does have a sober and sensible plan to manage the economy and the budget.



Political reporter Tom Iggulden has more from Canberra.



TOM IGGULDEN: After five months of open discussion about tax, the Treasurer Scott Morrison is managing expectations about the prospects for major change.



SCOTT MORRISON: I've talked about the changes being modest because that's what the opportunities are.



TOM IGGULDEN: With a GST rise off the table, changes to superannuation now stand as the main option open to the Government in its upcoming budget.



Yesterday Mr Morrison said he hoped to land on a decision soon. But the absence of detail about that decision is making life hard for the Treasurer, as he found out this morning speaking with Melbourne Radio 3AW's Neil Mitchell.



NEIL MITCHELL: You guarantee no retrospectivity?



SCOTT MORRISON: Well of course. On these sorts of issues, I mean people have different definitions of retrospectivity so, I mean, it's a fairly broad question, Neil.



TOM IGGULDEN: But Mr Morrison did admit that the Government's gone back to the economic drawing board after taking the recent decision to drop the GST off the table.



SCOTT MORRISON: The new idea is to continue to work through the plethora of other measures which were put back on the table by the Prime Minister and I only last September, only last September and work those through and ensure that in the budget we're able to deliver some modest tax relief to people so they don't go into these higher tax brackets.



TOM IGGULDEN: Figures out today show 300,000 Australians will move into the second highest tax bracket over the next four years. The Government's spent months highlighting that problem, only for the Finance Minister Mathias Cormann to appear to play the issue down yesterday by observing the current low rate of wage inflation.



Senator Cormann took to Sky News this morning to defend his comments.



MATHIAS CORMANN: I've seen those strange and entirely inaccurate characterisations and interpretations of what I said yesterday. I'm not downplaying the importance of bracket creep.



TOM IGGULDEN: But he then repeated his observations from yesterday.



MATHIAS CORMANN: It is slightly less of a problem than what it might have been in the past. It doesn't mean that it's not a problem. Of course, it is. It doesn't mean that we won't want to address it. Of course, we do.



TOM IGGULDEN: The softly, softly approach is not what critics claim voters were expecting when the Government changed leaders last September.



Scott Morrison was asked today, not for the first time, what has changed since Malcolm Turnbull challenged Tony Abbott over his economic leadership.



SCOTT MORRISON: It was only last September when we started the approach of looking at issues, whether it was superannuation or the GST or other things like that.



TOM IGGULDEN: Mr Turnbull was asked about his economic leadership a short time ago in his joint press conference with the New Zealand Prime Minister John Key, diverting the question to his guest.



MALCOLM TURNBULL: Well, why don't you start?



JOHN KEY: Okay, yeah, okay.



MALCOLM TURNBULL: As the senior leader.



JOHN KEY: I'm certainly not here to critique the Prime Minister but what I can say in all of the discussions that we have about economic issues, it's absolutely crystal clear that Malcolm understands those, he's passionate about them and he's got a very strong sense of what Australia needs to do.



TOM IGGULDEN: Mr Turnbull then wrapped up the press conference.



MALCOLM TURNBULL: Well, thank you. I can't think of a better way than here to end the press conference. Thank you all very much.



TOM IGGULDEN: Continuing defensiveness from the Government is giving the Opposition Leader Bill Shorten a strong platform to attack.



BILL SHORTEN: What do they actually stand for? They're all waffle and no action.



TOM IGGULDEN: Speaking on Channel 9 this morning the Industry Minister Christopher Pyne blamed Labor for some of the Government's economic travails.



CHRISTOPHER PYNE: If Labor and their friends in the Senate, in the crossbenches, keep blocking those savings, it makes it very difficult to govern.



INTERVIEWER: Well why don't you just double dissolution then and get on with it?



CHRISTOPHER PYNE: Well, that's an option. That is a live option, of course it is.



BILL SHORTEN: They need to stop threatening the Australian people with the threat of early elections just to cover up their lack of action on the economy of Australia.



KIM LANDERS: Opposition Leader Bill Shorten ending Tom Iggulden's report.