The Turnbull government’s full set of income tax cuts have passed the Senate with the support of One Nation and the Centre Alliance.
The landmark tax reform was the centrepiece of the government's 2018 Budget and will form a key part of its pitch to voters in the leadup to the next federal election.
The first round of tax cuts will take effect on July 1, but taxpayers will not see the money until they lodge their tax returns at the end of the next financial year.
The two minor parties gave the Coalition the final votes needed for the bill to pass - although the Centre Alliance said it would help a future government undo some of the long-term tax cuts included in the plan.
The package includes immediate tax cuts for low- and middle-income earners this year, kicking in on July 1, as well as future rounds of cuts in 2022 and 2024 that mostly benefit higher earners. All up, the cuts will cost the treasury $144 billion over the first seven years.
“After strong consideration with it, I've actually now decided to support the government in the tax cuts, which the Australian people need,” Pauline Hanson told reporters outside Parliament House on Thursday morning.
Senator Hanson had previously shared the concerns of Labor, Tim Storer and the Centre Alliance about the cost of stage three – the 2024 cut that would remove an entire tax bracket so those earning between $41,000 and $200,000 are taxed at the same marginal rate.
She said One Nation had concerns over the cost of the plan but was reassured the government could still deliver a return to surplus within two years.
"We've had meetings with the Labor Party over the whole tax thing. It was a real concern with me, with Stage 3, about the black hole and paying down debt," Senator Hanson said.
One Nation has also secured 1,000 government-supported apprenticeship places in exchange for its support - reviving an old deal the party made over the separate company tax cuts.
"I will be pleased if I can get that," Senator Hanson said.
The tax cuts were dealt a blow on Wednesday when the Senate voted to split the bill by stripping away the 2024 cuts.
But the Turnbull government immediately pledged to reattempt the bill in full and triggered another vote on Thursday.
The bill passed with the support of nearly the entire crossbench, with only the independent senator Tim Storer siding with Labor and the Greens in opposition.
The “loose alliance” of independent conservatives – senators Leyonhjelm, Bernardi and Anning – all voted with the government, as did the outspoken independent Derryn Hinch. Ex-One Nation senator Brian Burston, now in Clive Palmer’s new party, will also support the full package.
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