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The bill to implement Labor’s revised tax cuts has now passed both houses of Parliament, despite the changes receiving strong criticism from the Coalition and the Greens.
Prime Minister Anthony Albanese announced in late January that Labor would make amendments to the stage three tax cuts to deliver broader and better outcomes to all taxpayers.
The revised measures involved cutting the lowest rate of income tax from 19 per cent to 16 per cent and the second lowest from 32.5 per cent to 30 per cent, increasing the Medicare levy threshold and the top 45 per cent tax threshold.
Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 passed through the Senate without amendment late on Tuesday (27 February).
The Coalition agreed to pass the bill, but plans to go to the next election with its own tax reform that will go beyond the current reforms.
Prime Minister Anthony Albanese noted the passage of the bill, stating: “Every Australian taxpayer will receive a tax cut this year – not just some.
“Our tax cuts are good for middle Australia, good for women, good for helping with cost‑of‑living pressures, good for labour supply and good for the economy.
“Labor’s tax cuts are not the beginning of our actions on cost of living – and they will not be the end.
“They fit together with everything we are doing to build a stronger economy across the board.”
Treasurer Jim Chalmers added: “Our cost‑of‑living tax cuts are legislated, locked‑in and will roll out from 1 July.
“With real wages increasing, Australians are earning more, and now they will get to keep more of what they earn, because of our bigger tax cuts for more taxpayers.
“This is a big win for working families, a big win for women and a big win for middle Australia.
“We want Australians to earn more and keep more of what they earn and our bigger tax cuts for more taxpayers will help make that happen.”
The Minister for Finance and Minister for Women, Katy Gallagher, added; “Labor’s tax cuts are putting more money back in the pockets of Australian women.
“From 1 July, 90 per cent of working women will receive a bigger tax cut.
“Under the Albanese Government Australian women can earn more and keep more of what they earn.
“We’re continuing to drive economic equality, as a way to continue to strive for gender equality in Australia.”
Senator Jane Hume said the Coalition is committed to “lower, simpler and fairer taxes” and agreed not to oppose the reduction in the $0.19 tax rate to $0.16 with Australians “hurting” in the current economy.
Ms Hume said the Coalition’s tax reform package would “fight bracket creep and enshrine aspiration in the tax system”.
However, Greens senator Peter Whish-Wilson lashed Labor over the amount spent marketing the redesigned tax changes and stated the changes did not go far enough to deliver cost-of-living relief for lower-income earners.
“The Albanese government is out of touch with Australians living in a cost-of-living crisis,” said Mr Whish-Wilson.
“They’ve spent $40 million on marketing this broken promise. It’s unnecessary. You don’t need to apply for the tax cuts, they work automatically through the ATO – there’s no education component whatsoever.”
Treasurer Jim Chalmers has previously defended the revised tax cut policy, stating that they will still deliver substantial cuts, but will offer middle-income earners more significant cost-of-living relief.
“Everyone still gets a tax cut but middle Australia gets a bigger tax cut,” said Dr Chalmers, following the announcement of redesigned policy last month.
The Senate also passed the Treasury Laws Amendment (Cost of Living – Medicare Levy) Bill 2024 on Tuesday, which increases the Medicare levy and Medicare levy surcharge low-income threshold amounts for individuals, families, and individual taxpayers and families eligible for the seniors and pensioners tax offset.
[Related: Federal government introduces stage 3 tax cut legislation]
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