Tax Cuts Proposed by Labor Approved by Lower House, to be Discussed in Senate

One of the most unexpected elements in Labor’s budget for the election is the tax cuts for low-income earners. This proposal has successfully passed through the House of Representatives and is now up for debate in the Senate.

Treasurer Jim Chalmers presented the bill during the budget night, which aims to decrease the 16 percent tax rate (for individuals earning between $18,201 and $45,000) to 15 percent next year and 14 percent the following year.

In terms of actual savings in dollars, this translates to $268 in the first year and $536 in the second year. The plan, estimated to be valued at around $17.1 billion over four years, is designed to provide relief for taxpayers as the Labor government seeks to secure victory in the upcoming election.

By the late afternoon of March 26, the bill was successfully approved by the House of Representatives with a vote of 91 to 55, with the Coalition opposing the plan. The Senate is the next hurdle, where a vote is anticipated later that evening.

Political Fireworks in the House

During the parliamentary debate, Treasurer Chalmers defended the proposal, stating, “To vote against this legislation would hinder hard-earned money from remaining in the pockets of every hard-working Australian.”

He criticized the opposition’s position, adding, “This is the stance of those opposing with the shadow treasurer’s sudden decision yesterday to oppose additional tax cuts for every Australian taxpayer.”

On the other hand, Opposition Leader Peter Dutton dismissed the plan as a “hoax” and suggested that he will present an alternative policy in his budget reply speech on March 27 evening.

“You are asking Australians to be grateful for 70 cents a day in 15 months.”

“Earlier, the prime minister said ‘mission accomplished,’ the work is done, and Australians should be thankful for everything they have received.”

He accused the government of irresponsible spending, stating, “This Labor Party has accumulated a trillion dollars of debt … and they expect Australians, an average family who has suffered a $50,000 loss in the last three years of the Albanese Labor government, to appreciate the cuts.”

Shadow Treasurer Angus Taylor criticized the scale of the proposed tax cut, suggesting that the daily savings would only cover “a lollipop… a discounted bread roll… or an entry into a jelly bean guessing competition.”

‘Dulolo with No Sololo’: PM

Prime Minister Anthony Albanese characterized the Coalition as “dulolo with no sololo,” implying that they were out of touch and lacked practical solutions.

“Today, they must decide whether they support Australians earning more and keeping more of what they earn, which is our agenda,” said Albanese.

Senate Likely to Back the Bill

Labor’s tax cuts seem likely to receive approval from the Senate.

Former Liberal Party member Senator Gerard Rennick has expressed his support, although he argued that the cuts should have been more extensive, advocating for raising the tax-free threshold from $18,201 to $40,000.

Senator Jacqui Lambie has also promised her support, bringing the government closer to securing the passage of the bill, especially after Greens leader Adam Bandt stated that his party would not block the bill.

Push for Small Business Relief

Meanwhile, Senator David Pocock put forth an amendment aimed at benefiting small businesses by reintroducing the instant asset write-off provision.

Seeking bipartisan support, Pocock urged, “Instead of playing politics, let’s pass these measures for Australia’s 2.5 million small businesses.”

He criticized the parliament for not adequately supporting small enterprises.

The Coalition promptly endorsed his proposal, with Senator Jane Hume stating, “The Coalition will support your efforts to pass this motion.”

“The instant asset write-off is a crucial aspect of our tax system to enhance productivity—an aspect that has plummeted to historic lows under this government and is crucial for driving economic growth in this challenging setting.”