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The updated tax cuts bill proposed by the Labor party has successfully navigated through both chambers of parliament, marking a significant development for taxpayers. Despite facing opposition from the Coalition and the Greens, the bill received approval in the Senate, signaling a forthcoming adjustment in tax brackets effective from July 1.
Prime Minister Anthony Albanese disclosed in late January that Labor would introduce modifications to the stage three tax cuts, aiming to extend benefits to a wider spectrum of taxpayers.
The revised measures involve:
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Cutting the lowest rate of income tax from 19 per cent to 16 per cent.
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Cutting the second lowest rate of income tax from 32.5 per cent to 30 per cent.
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Increasing the Medicare levy threshold.
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Increasing the top 45 per cent tax threshold.
The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 was endorsed by the Senate without alterations on a recent Tuesday evening, highlighting a bipartisan agreement on the necessity of addressing tax reform. While the Coalition expressed reservations about the bill's scope, it pledged to present its own tax reform agenda ahead of the upcoming election, emphasising the principles of reduced complexity and fairness in taxation.
Senator Jane Hume affirmed the Coalition's commitment to easing the tax burden on Australians amid economic challenges and outlined the Coalition's forthcoming tax reform strategy, aimed at combating bracket creep.
Criticism from the Greens, voiced by Senator Peter Whish-Wilson, centered on the perceived inadequacy of the revised tax changes in alleviating the financial strain on lower-income earners. Whish-Wilson condemned the government's spend of $40 million on promoting the redesigned tax measures, deeming it unnecessary given the automatic implementation of tax cuts through the Australian Taxation Office (ATO).
Treasurer Jim Chalmers defended the revised tax cut policy, emphasising its capacity to provide significant relief to middle-income earners while maintaining overall tax reductions. He underscored the policy's focus on addressing the cost of living challenges faced by middle Australia, a sentiment echoed by the Senate's passage of the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024, which aims to adjust Medicare levy thresholds for various taxpayer demographics.
