Low and middle income earners will soon keep more of what they earn after revamped tax cuts cleared federal parliament.

Labor’s amended tax package was endorsed by the Senate on Tuesday evening after receiving backing in the lower house.

Australians earning less than $150,000 will get a larger return than was promised under the so-called stage three tax cuts, which were legislated in 2018.

Those earning more than $150,000 will still receive a tax cut but it will be less than originally planned.

The changes are set to take effect from July 1.

Calling a late media conference to celebrate his political win, Prime Minister Anthony Albanese said the tax cuts were aimed at “middle Australia” and would help people struggling with cost of living pressures.

“This is a huge win for all 13.6 million Australia taxpayers,” he told reporters in Canberra.

“Under Labor, Australians are earning more and they will get to keep more of what they earn.”

The coalition would not stand in the way of lower taxes and more relief for struggling households, Liberal senator Jane Hume told parliament.

“But that doesn’t mean we condone the mistruth that was told,” she said, referring to Labor’s election promise not to amend the tax reforms.

The senator also questioned why the government needed $40 million to advertise its tax package.

Senator Hume chastised the government for ramming through the legislation, saying it was a political ploy to win an upcoming by-election in the Victorian seat of Dunkley.

“Why are they running out of time? I’ll give you one guess, and it starts with the letter D,” she said.

“They are running scared because the people of Dunkley have expressed white-hot anger towards this government.”

The opposition has promised to take a revamped tax policy to the next election.

The Greens wanted the legislation referred to a committee that would report back on March 25 but failed to get support in the Senate.

The minor party also pushed for the government to redesign the package.

Putting in place a tax offset for low and middle income earners and stripping the planned tax cuts for people earning above $205,000 would pump $80 billion into the budget over 10 years, they said.

Prime Minister Anthony Albanese defended the push to pass the legislation, saying Australians deserved cost of living relief.

“Our government wants to deliver a tax cut for every Australian taxpayer, all 13.6 million of them,” he told parliament.

“We want people to keep more of what they earn.”

Under Labor’s changes to the stage three package, the 37 per cent tax bracket slated for the scrap heap will be retained.

 

Dominic Giannini
(Australian Associated Press)