Angus Taylor’s promise to deliver $22.5 billion in tax relief to Australians has a $12.5 billion black hole in it, according to new costings prepared by Labor, raising questions over how the opposition will pay for the cut if it wins government.

The dispute over income tax figures heightens what has become a major political battleground after Labor on Tuesday delivered a budget that pared back major tax concessions linked to housing, decisions Taylor said he would repeal, describing them as “pulling up the ladder of opportunity” on young Australians.

Opposition Leader Angus Taylor wants to index income tax rates, but Labor says the opposition costings are incorrect.…