With Labor's help, Coalition's $158b tax cut package heads for Senate battle
Labor has helped pass the government's full suite of tax cuts despite saying it would be economically reckless to agree to reforms not due to begin for another five years.
It means up to $1080 in tax relief for up to 10 million Australians is a step closer, with the government's three-stage suite of tax cuts now headed to the Senate.
Under the Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Bill 2019, the maximum low and middle-income tax offset will be raised from $530 to $1080 and will be backdated for the last financial year.
In 2022-23, the low-income tax offset will be raised from $645 to $700 and the top threshold of the 19 per cent tax bracket will be cover employees earning $45,000 from July 1, 2022.
In 2024, well after the next election, the 32½ per cent rate will drop to 30 per cent and will apply to those on incomes of $45,000 and $200,000.
Labor had tried to bring forward stage two of the tax cuts and had been arguing against being forced to vote for stage three of the tax cuts not due to begin in 2024/25.
Opposition Leader Anthony Albanese tried unsuccessfully to amend the name of the bill so it would be called the "Tax Relief So Working Australians Keep More Of Their Money But Not For A Really Long Time Bill 2019."
But when that failed, Labor did not oppose the government's bill, leaving just the Greens Adam Bandt and Tasmanian Independent Andrew Wilkie voting no, after three hours of debate.
"Tonight our full package of tax cuts passed the House and are now on the way to the Senate," Treasurer Josh Frydenberg tweeted.
"Labor’s amendments were defeated as they continue to put obstacles in the way of tax cuts for millions of Australians."
The government does not have a majority in the Senate and will either need Labor's support or the votes of four of the six crossbenchers. Senator Cory Bernardi has said he will support the $158 billion in tax cuts and the government is negotiating with the two Centre Alliance senators. Centre Alliance's lower house MP Rebekah Sharkie voted for the government's bill pending these discussions.
Centre Alliance's voting partner Tasmanian Jacqui Lambie has yet to declare her hand. Pauline Hanson has said One Nation will vote against the tax cuts.