Tax Cuts Become Law After Senate Approval

For taxpayers, benefits will translate to savings of $268 in the first year and $536 in the year after that.

Australian banknotes and a one dollar coin. Squirrel_photos/pixabay

The Australian government’s proposed tax cuts have officially become law after the bill passed the Senate late on March 26.

Valued at $17.1 billion over four years, the tax plan aims to provide financial relief to taxpayers as the Labor government positions itself ahead of the upcoming federal election.

Treasurer Jim Chalmers, who introduced the bill on budget night, outlined the key measures, a reduction in the 16 percent tax rate (for those earning between $18,201 and $45,000) to 15 percent next year, and 14 percent the following year.

For taxpayers, this translates to savings of $268 in the first year and $536 in the year after that.

By the afternoon of March 26, the bill had cleared the House of Representatives with a vote of 91 to 55, despite opposition from the Coalition in both chambers of Parliament.

Political Debate on Tax Cuts

Finance Minister Katy Gallagher criticised the Coalition in the Senate for “saying no to everything.”

“They have voted no to tax cuts for every taxpayer. Let’s hope the whole of Australia sees how you behave tonight,” she said.

During the parliamentary debate, Chalmers defended the proposal.

“To vote against this legislation would be to stand in the way of more hard-earned money staying in the pockets of every hard-working Australian,” he said.

He also criticised the opposition’s approach, saying, “This is what those opposite are proposing with the shadow treasurer’s brain snap last night when he said that he would oppose more tax cuts for every Australian taxpayer.”

Coalition’s Alternative Plan

Shadow Treasurer Angus Taylor announced that the Coalition would repeal the cuts if they win the federal election in May. Instead, they plan to slash the fuel excise by 25 cents per litre for a year.

“This will replace what Labor is doing, which we think is inappropriate under the circumstances,” he told ABC Radio. “This is a lower tax.”

Opposition Leader Peter Dutton dismissed the government’s plan as a “hoax,” previewing an alternative policy he will present in his budget reply speech on March 27.

“You are asking Australians to be thankful because 70 cents a day is coming in 15 months’ time,” Dutton said.

“Now, you heard the prime minister earlier say that ‘mission accomplished,’ the job is done, and Australians should be thankful for everything they’ve got.”

Dutton accused Labor of reckless spending.

“This Labor Party has racked up a trillion dollars of debt … and they’re saying to Australians, an average family who is $50,000 worse off under the last three years of the Albanese Labor government, to be grateful for the cuts,” he said.

All eyes now turn to Dutton, who is set to deliver his budget reply later today.