Taxpayers will get up to $1000 back in their pockets four years into an Angus Taylor-led government under a plan to end the “theft” of bracket creep.

The Opposition Leader used his budget reply to outline a vision for a country where life was affordable, parents could afford to take time off work to look after their baby, and Australians had confidence in their future.

His two-stage tax relief plan will cost the budget tens of billions of dollars but Mr Taylor said it was vital to end the “inflation tax” that pushes people into higher tax brackets as wages rise.

It would link the bottom two tax brackets to inflation immediately after the 2028 election, and the top two from 2031-32.

This gives average taxpayers a tax cut of $250 in the first year, rising to $1000 by the fourth year.

“This is generational tax reform. It’s fair, simple, and honest. It will back Australians to work hard, take risks, and invest in their future,” Mr Taylor said.

“It will force government to respect your money. Any government that wants to tax Australians more should have the courage to front up and to take that tax increase to an election.”

Despite no government since 1981 having indexed tax brackets, preferring instead to make irregular cuts that return bracket creep, Mr Taylor said it was “Labor stealing from Australians.”

The policy revisits a plan for tax relief Mr Taylor wanted to Coalition to offer at least year’s election.

Independent economist Chris Richardson said it made economic sense, but the big question was how the Coalition would pay for it.

“This is a cost that builds pretty substantially over time,” he told The West.

“What it’s saying is the system intentionally hands politicians a bit of extra money each year (via bracket creep). This takes away that flexibility from them.”

The plan would cost the Budget’s bottom line $23.2 billion over the four years after the next election, according to analysis by The West using the Parliamentary Budget Office’s build your own budget tool.

By 2035-36, it will cost $141.5 billion.

The leader didn’t outline any costings in his speech, despite shadow finance minister Claire Chandler saying on Thursday morning that he would.

The Coalition has already said it would keep the Government’s Working Australians Tax Offset (WATO) that also cuts taxes by $250 a year at an annual cost of about $3.3 billion.

It would repeal Labor’s changes to capital gains tax discounts, negative gearing and taxes on trusts, foregoing $77 billion in revenue over the next decade.

In his budget reply, the Liberal leader more than doubled some policies from Tuesday’s Budget: increasing a housing infrastructure fund to $5 billion, and allowing small businesses an instant asset write-off of $50,000 instead of $20,000.

Mr Taylor said the infrastructure fund would unlock 400,000 new homes, although Treasury only modelled a 65,000 increase from Labor’s $2 billion version.

On the savings side, the Coalition would scrap several Labor housing initiatives including the Housing Australia Future Fund and the $3 billion bonus on offer to States who build more than their share of the 1.2 million home target, along with the “net zero agency”, new power lines, and tax breaks for electric vehicles.

80 per cent of windfall revenue would be sent to a new Future Generations Fund to pay for infrastructure.

And it will restrict welfare payments to Australian citizens only.

The limit on 17 welfare programs, including the NDIS, family tax benefits and paid parental leave, would save the budget “many billions, many billions” over the next four years, Mr Taylor said on Thursday morning, but the exact figure would be released “close to the election”.

He also wants to explicitly link net migration to housing.

“Never again will a government be able to bring in more people than our housing can support. That’s our commitment,” Mr Taylor said, detailing a policy to cap net overseas migration based on the number of new homes built in the previous year.

Master Builders Australia said the nation needed more migrants to help build homes at the pace required, not fewer.

The Liberals won’t offer a precise immigration number until closer to the election.

Last year, 173,890 new homes were built.

Net overseas migration – which includes returning Australian expats, who can’t be prevented from entering the country, and temporary migrants staying for more than 12 months like international students and backpackers – was 295,000.

This net figure has attracted intense scrutiny since it soared to more than 550,000 in the year after the nation’s borders reopened following the pandemic, when international students and skilled workers flooded back into the country after being barred, and far fewer people than usual departed.

Since then, it’s dropped by 45 per cent as Labor tightened migration settings.

Home Affairs Minister Tony Burke questioned how the Coalition would achieve such severe cuts, based on how they’ve responded to government moves.

“If they’re opposed to doing anything on backpackers, opposed to do anything on students, for family visas, it’s already the case that for a parent visa, which you can’t apply for until you’re 67, it’s a 33 year wait – the only thing left that they will attack will be the skills that we need,” he told Question Time.

Mr Taylor has previously said the Coalition would target some 77,000 visa over-stayers and make them leave the country.

Greens deputy leader Mehreen Faruqui accused the Coalition of “outright racist dog whistling,” a sentiment echoed by several Labor backbenchers.

Jerome Laxale he said the “toxic migration debate” was designed to chase voters lost to One Nation in the Farrer by-election and insisted it would be the “death of the Liberal party” and what they stood for.

One Nation leader Pauline Hanson claimed credit for a Budget reply “replete with One Nation policies.”

“While they’ve been telling everyone that One Nation has no policies, they’ve been reading them very carefully because they’re desperate for some good ideas,” she said.

“For years I’ve been demanding that immigration be slashed, that people who come here contribute for at least eight years before they’re eligible for citizenship and benefits, and that we ensure those who come here adhere to our laws, values and customs. The major parties called it racist and extreme. Now the leader of the Liberal Party is putting it in his Budget speech.”