AceBusinessDesk – The government’s overhaul of the stage 3 tax cuts passed the Senate unamended on Tuesday evening, having previously passed in the House of Representatives.

Ace Press News From Cutting Room Floor: Published: Feb.28: 2024: ABC Business News: TELEGRAM Ace Daily News Link https://t.me/+PuI36tlDsM7GpOJe

The tax cuts will now become law.

The changes aim to broaden the benefits of the original tax cuts, halving the tax break offered to wealthier Australians, but bolstering the benefit for those on lower incomes.

The original stage three tax cuts sought to ‘flatten’ the tax system by abolishing a tax bracket, and address bracket creep by pushing out the top tax bracket.

The new changes retain the tax bracket that would have been abolished but adjust tax rates to benefit both lower and higher-income earners.

The passage of the tax cuts unamended was expected, with the Coalition offering support for the changes despite arguing that higher-income earners have been “betrayed”.

The changes take effect from July 1 and will take place automatically — with the tax office simply taking less tax out of worker’s pay packets.

It’s a political victory for the federal government, which spent years defending its position in support of the former Coalition government’s original stage three tax cuts, only to shift six months out from that policy becoming reality.

The prime minister defended the change in position arguing “When economic circumstances change, you have to change your economic policy”.

And it potentially sets up a new policy fight over tax heading into the next election.

While the Coalition supported the changes through the parliament, on the grounds it would not ‘stand in the way’ of tax cuts for Australians, it has flagged it will put a whole new tax policy to the public ahead of next year’s poll.

PM confident tax message has been well received

Speaking on the passage of the tax cuts, Anthony Albanese indicated he would welcome an election contest on tax policy – pushing the Coalition to detail what it will propose, and how it would pay for further tax cuts.

“We made sure that this plan costs $107 billion. That’s around about the same amount (as the original stage three plan), we thought that was important,” he said.

“If the Liberals are going to have tax cuts, they have to say – where will the cuts be for services?”.

The passage of the bill comes just days out from the Dunkley by-election, where the Coalition is hoping it can take a Labor-held seat off the government.

Mr Albanese said he’s confident the government’s tax message has been well received.

“We hope to get a good result in the Dunkley by-election, and everyone in Dunkley will know that we wanted every single taxpayer in Dunkley to get a tax cut,” he said.

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