Australia

Government's $158 billion tax package passes parliament

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The federal government's flagship tax cuts passed parliament on Thursday with Labor supporting legislation after failed attempts to make changes.

Many Australians lodging their tax returns over the next few weeks will find themselves more than $1000 richer after parliament passed the Morrison government's signature tax cut package.

The government secured the crossbench support it needed to pass the $158 billion plan unchanged through the Senate on Thursday evening.

Australian Prime Minister Scott Morrison in Question Time.
Australian Prime Minister Scott Morrison in Question Time.
AAP

The first stage of the tax plan will deliver up to $1080 to low and middle-income earners when they lodge their tax returns for 2018/19.

The second stage delivers a 19 per cent tax rate from 2022/23 to people earning up to $45,000.

The final stage due in 2024/25 flattens the tax rate to 30 per cent for people earning between $45,000 and $200,000.

Opposition Leader Anthony Albanese and shadow Treasurer Jim Chalmers speak to the media.
Opposition Leader Anthony Albanese and shadow Treasurer Jim Chalmers speak to the media.
AAP

Labor tried in vain to amend the bill to strip out the third stage and deliver the second stage sooner.

But the opposition voted in favour of the legislation, which passed 56 votes to nine, arguing it wouldn't oppose tax cuts for workers.

Independent senator Jacqui Lambie backed the full package in return for action on Tasmania's homelessness crisis.

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Jacqui Lambie to help deliver government tax cuts
Jacqui Lambie to help deliver government tax cuts

She wants Tasmania's $157 million public housing debt be wiped or renegotiated, but is still ironing out a deal after supporting the cuts.

"I believe the government is coming from [a place of] good faith. I can tell you. I've been fighting to get this public housing debt removed since day one, from the first day I came up here," Ms Lambie told SBS News on Thursday. 

"[It's] not a great deal of money for the Commonwealth in the big scheme of things … I've seen them waste that sort of money."

"It's not going to solve all the problems but right now I need to get those kids off the streets."

Centre Alliance - which carries two Senate votes - also backed the full package after the government listened to its thoughts on how policy on gas prices should be shaped.

Finance Minister Mathias Cormann said the government would deal with both the gas and Tasmanian housing issues "in good time".

The gas industry is seeking clarity from the government, urging the coalition to reveal exactly what it has agreed with Centre Alliance.

Former Liberal senator Cory Bernardi had always backed the full package, giving the government the four crossbench votes needed to pass its legislation.

Prime Minister Scott Morrison lashed out at Labor for opposing the full plan, saying they had learned nothing from the election result.

"Why do they cling to this outdated and moribund view that says you have to tax Australians more to grow the economy?" he told parliament.

"What is it about higher taxes that the Labor Party so obsessed with, that means they remain shackled to this view of the world?"

Question Time at Parliament House in Canberra on Thursday.
Question Time at Parliament House in Canberra on Thursday.
AAP

Labor waved the plan through after its amendments failed following an agreement in shadow cabinet on Thursday afternoon.

"We do not want the circumstances whereby an economy that is struggling prevents people getting a tax benefit of up to ... $1080," Opposition Leader Anthony Albanese told reporters.

"The economy needs that, the economy needs that now."

Labor will review its position on the third stage of the plan closer to the next election in three years' time.

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