Bigger tax cuts for lower and middle income Australians are all but assured after the coalition agreed to wave through the Albanese government’s amended package.
Opposition Leader Peter Dutton said he “would not stand in the way of those doing it tough” and in clear need of tax relief.
“We’re supporting this change not to support the prime minister’s lie but to support those families who need help now,” he told reporters on Tuesday.
The coalition has consistently condemned the Labor government for breaking its election promise to leave the cuts untouched.
Mr Dutton said the opposition would take a significant policy to reduce taxes for Australians to the next election.
Coalition MPs and senators discussed the tax changes during a partyroom meeting on Tuesday, with four or five people putting forward suggested amendments and one arguing against accepting Labor’s plans.
Scott Morrison, an architect of stage three tax cuts, defended his original proposal but endorsed backing the reworked package.
The coalition will refer the legislation to a Senate committee before it passes parliament.
Treasurer Jim Chalmers introduced laws backing the broader stage three package to the House of Representatives, during the first sitting day of the year.
Dr Chalmers said the changes would mean more tax relief for more people.
“It’s about recognising that aspiration in this country is not and should not be limited to people whop are already doing pretty well. Middle Australia is aspirational Australia,” he told parliament.
“This is good for workers and it’s good for our economy. This is not relief or reform, this is relief and reform, more relief for middle Australia and a better reform for our economy.”
Prime Minister Anthony Albanese wants the tax cuts legislated by Easter, before they take effect in July.
He and the treasurer insists the tax cuts will not impact inflation.
“Tax relief rolls out over the course of the year, not in a single payment, so its effect is staggered,” Dr Chalmers said.
“It begins to flow from the middle of the year when inflation is expected to moderate further.”
Under the revised package, people earning less than $150,000 will receive a greater tax cut, while those earning above that amount will still receive benefits but less than previously forecast.
Dr Chalmers said while the changes to stage three came with political risk, they were necessary due to the economic environment.
“We knew that it would be politically contentious and contested to amend the tax changes which were legislated five years ago when the world was a very different place,” he said.
“Australians understand that when economic circumstances change, the right thing to do is improve and align our economic policy as well.”
Economic analysis shows electorates held by Nationals MPs would gain most from the altered policy.
Findings released by the Australia Institute reveal voters in Nationals-held electorates would receive a $326 cut, while those in Liberal seats would be $226 better off.
Voters in electorates held by the government would receive an extra $229 per person.
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