Income tax cuts, IR reform coming under re-elected Coalition government, Ley says

Opposition Leader Sussan Ley has outlined the Coalition’s economic plan pledging to reduce personal income taxes, slash red tape and cut government spending.

In a speech to the Centre for Independent Studies on Monday (20 October), Opposition Leader Sussan Ley said the Coalition’s economic strategy would be centred on two key goals: lowering personal income taxes and repairing the budget by curbing public spending.

“Every time we say no to Labor’s waste, we will look first to return those savings to taxpayers or to strengthen the nation’s finances,” Ley said.

“Because every dollar Labor spends is a dollar you have to pay, and so every dollar we save is one we will try to put back in your pocket.”

Ley said the Coalition had started preliminary work on its tax cuts plan, but the scale and scope of the proposed package would be dependent on the evolving budget position.

She also pointed out that the average worker paid 24.3 per cent of their income in tax, up from 22.3 per cent when John Howard left office in 2007. The Parliamentary Budget Office estimated that this figure will climb to 27.7 per cent by 2035–36.

Industry bodies and economists have warned that Australia’s taxation system is overly reliant on income tax to cover growing public spending pressures, leaving the tax burden squarely on the shoulders of workers.

In 2022–23, the Australian Taxation Office raked in $577.4 billion in tax revenue, with 51.6 per cent collected from individual income taxes. Australia’s share of personal income tax revenue is more than double the 2022 OECD average of 23.6 per cent.

Ley said the Coalition would aim to deliver income tax cuts by reining in government spending.

“We cannot build prosperity, whether it be economic, social, institutional or personal, by taxing its very foundations out of existence,” she said.

“The answer is living within our means, and recognising and rewarding the effort made by hardworking Australians by enabling them to keep more of what they earn.”

She added that the Coalition would also focus on boosting productivity and deregulating industry.

“One of the fastest ways to boost investment and productivity is to clear the clogged arteries of regulation that are strangling projects and entrepreneurship,” Ley said.

“Whether it’s building critical infrastructure, opening a mine, or starting a new business venture – no project that meets environmental and safety standards should be stuck in limbo for years on end waiting for bureaucratic sign-offs.”

Ley said that overlapping federal and state assessments should be streamlined, regulators should be required to make decisions in a clear time frame, and project approvals should be sped up.

She added that the Albanese government’s “restrictive” industrial relations changes were a handbrake on productivity, and pledged to “chart a different course” from multi-employer bargaining laws.

“Multi-employer bargaining laws are threatening small businesses with conditions they cannot afford,” she said.

“We believe in enterprise-level bargaining – where businesses and their staff can strike agreements that reward higher performance and suit their circumstances – rather than industry-wide decrees.”

Ley also said the Coalition would support flexible work arrangements, in a reversal from the party’s pre-election position on the issue.

“We believe in options like flexible hours, remote work arrangements, and modern award structures that reflect today’s digital economy,” Ley said.

“Let me be very clear: we support ‘work-from-home’.

“This is something that we got wrong in the lead-up to the 2025 election. And we have listened.”