22 June 2018Hot off the Press
Personal income tax will be cut by $144 billion over the next seven years, after the Senate voted to pass the Government’s Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 on Thursday.
The bill passed 37 to 33 with nine cross-bench Senators voting with the Government; Labor, the Greens, and independent Senator Tim Storer voted against.
Those opposed to the Bill argued that it was too generous to high-income earners, who Labor Senator Penny Wong said would receive two-thirds of the benefit.
But Prime Minister Malcolm Turnbull said the income tax plan is “thoroughly fair”.
During Question Time the Prime Minister said: “Today we have seen a massive win for hard-working Australian families. They will be able to keep more of the money they earn.
“It is their money — they earned it — and we should take no more of it than the Government needs to deliver the essential services Australians rely on.”
The first stage of the tax cuts is a rebate of up to $530 for the next financial year, and a change to the 32.5% tax bracket from 1 July 2018 which will reduce the taxes of three million people by an extra $135 a year.
According to the Prime Minister, those earning more than $200,000 will pay a larger share of personal income tax than they do now after the plan is fully implemented in 2025.
Labor and Centre Alliance, both of which voted against the Bill, supported the initial stages of the three-part staggered implementation, but opposed the 32.5% tax bracket that will apply to 94% of workers earning between $41,000 and $200,000 by 2025, and deliver a $7,225 tax cut for those earning over $200,000 compared to a $200 cut for those earning $30,000.
Senator Rex Patrick said that Centre Alliance would not “stand in the way of low to middle-income earners receiving tax cuts”, but his colleague Stirling Griff said they would be “more than happy to support” a repeal of the third stage if Labor wins the next election.