The cracks are forming internally in Labor after the federal Treasurer butted heads with Premier Chris Minns over the merits of income tax indexation.

Michael McLaren says Labor and its tactics have been unmasked, with Albanese essentially lying under oath.

“On the one hand, government must be willing to reduce its spending. And on the other it has to incentivise growth. Alas, this budget does neither,” he said.

He also points out that they have refused to accept their approach, and that their taxes and tobacco excise taxes are not working.

“When Australia faced inflation above the average of our peers, the Albanese government didn’t admit that its spending fueled the fire but added even more fiscal petrol to the flames,” he added.

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