Stage 3 tax cuts changes have passed through parliament with relief set from July 1

Labor’s overhauled stage 3 tax cuts have sailed through the parliament, guaranteeing taxpayers additional relief come July 1.

After a vote was called in the Senate on Tuesday evening, the Coalition begrudgingly supported the government’s tax overhaul which will mean all of Australia’s 13.6 million taxpayers will pay receive tax relief from the middle of the year.

Opposition finance spokeswoman Jane Hume told the Senate the Coalition would not oppose tax relief for Australians.

“But that doesn’t mean we condone the mistruth that was told,” Senator Hume said, pointing to the government’s broken promise in altering the tax package.

The Greens, who sought to refer the legislation to committee, failed to get support for their proposal.

The Albanese government’s rejig of the stage 3 tax cuts retains the tax-free threshold at its current rate of $19,200, lowers the rate on income earned up to $45,000 to 16 per cent – down from 19 per cent – and lowers the rate of the $45,000 to $135,000 tax bracket to 30 per cent – down from 32.5 per cent.

Additionally, the 37 per cent tax bracket will be retained between $135,000 and $190,000, after which the top marginal tax rate will then kick in at $190,000 at a 45 per cent rate.

The overhaul usurps tax changes, introduced by the then-Morrison government in 2019, which would have created a single tax bracket between $45,000 and $180,000 at a ra

te of 30 per cent.

Despite offering additional relief to taxpayers under pressure from elevated interest rates and still-high inflation, Prime Minister Anthony Albanese has failed to gain further support in opinion polls according to Newspoll and Resolve surveys.

The Coalition has vowed to develop a tax reform package ahead of the next federal election, due by May 2025 at the latest, which would be “in keeping with the stage 3 tax cuts”.

More to come

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