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A broader range of taxpayers are set to receive tax cuts from 1 July, with Labor’s tax cuts bill passing through the Senate.
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Revised tax cuts pass both houses
27 February 2024
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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.
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.
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.
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Ms Hume said the Coalition’s tax reform package will “fight bracket creep and enshrine aspiration in the tax system”.
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.
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