Tax cut needed to ease mortgage pain: Libs

Reading out Labor media releases and comments from now-Prime Minister Anthony Albanese pledging support for the tax cuts as legislated before the election, Ms Ley said changes would be a "fundamental breach of faith".

"This is a tax cut millions of Australians were promised, millions of Australians are expecting and millions of Australians are owed," she told reporters in Sydney.

Ms Ley said Labor members calling for the tax cuts to be wound back, delayed or abolished were focusing on the wrong end of the income spectrum and "demonising those earning a good income".

The cuts reduce the marginal tax rate to 30 per cent for people earning between $45,000 and $200,000 from July 2024. 

"We are in a cost of living crisis. Australians are staring into the abyss, 2.5 million Australians are relying on tax relief that has been promised," Ms Ley said.

"It's a return to the class war rhetoric we saw in 2019."

But Skills Minister Brendan O'Connor said the government's position hadn't altered despite the tax cuts being reportedly up for debate.

"Of course, we are looking at the impacts on the budget," he told Nine's Today program, while refusing to say whether the tax cuts were discussed at Wednesday's cabinet meeting. 

"We are in a very difficult situation ... where inflation is very high, people are struggling because of the interest rate hikes, which is impacting on their mortgage payments.

"But as for stage three, we have not altered our position."

There has been speculation the government is considering changes to the legislated stage three tax cuts, which will provide the most benefit to high-income earners.

Finance Minister Katy Gallagher on Wednesday reiterated the government hadn't shifted its policy but did not deny changes were being discussed.

When asked about the current economic headwinds, Liberal frontbencher Simon Birmingham said a better-than-forecast budget bottom line and a strong economy had put the nation in good stead.

"Conditions haven't significantly changed since the election," Senator Birmingham said.

In 2021/22, the budget deficit was a healthier-than-expected $32 billion, with high commodity prices and low unemployment largely responsible for the improved bottom line.

But Labor Party president and former federal treasurer Wayne Swan disagreed, saying the government would be naive not to consider international factors ahead of the upcoming budget.

"Any government that sat down in this environment and said they weren't going to review all of the policy settings in light of what has gone on, would be sticking its head in the sand," he said.