Labor’s reworked stage 3 tax cuts pass Senate
The federal government’s reworked stage 3 tax cuts have passed the Senate, giving every working Australian a reduced tax bill as politicians look for solutions to the cost-of-living crisis.
The Coalition supported the bill, which significantly changes the cuts it pushed through while in office, giving more relief to low- and middle-income earners and less to the higher end of town.
But it continued to whack Labor for breaking an election promise to keep the original tax plan as originally legislated.
“Coalition support for a tax cut should never be read as an endorsement of Labor’s breach of faith,” opposition finance spokeswoman Jane Hume told the Senate as the bill was debated.
Under the new tax regime, the average worker will take home an extra $29 a week from July 1 while the lowest-paid gets $15 more.
Prime Minister Anthony Albanese described the bill as a “huge win for all 13.6 million Australian taxpayers”.
“Under Labor, Australians are earning more and they will get to keep more of what they earn,” he said, in a video posted to social media tonight.
It cuts the second tax bracket, which previously topped out at $120,000, from 32.5 per cent to 30 per cent and applies it to everyone earning up to $135,000.
The tax rate on earnings under $45,000 will be slashed from 19 per cent to 16 per cent.
There’s also relief for higher earners by only applying the top rate of 45 per cent to those earning more than $190,000, up from $180,000.
Even those earning more than $190,000 will save about $4500 a year, a substantial amount but roughly half as much as they would have under the Coalition’s plan.
Overall, the benefits flow to many more Australians under Labor’s model, something Albanese will no doubt be hoping voters weigh up when considering whether to punish him for the broken promise.
Broadly speaking, anyone earning up to about $150,000 is better with the reworked cuts, while anyone earning more than that figure would have saved more under the Coalition’s plan.
