Treasurer Scott Morrison has presented his $140 billion, seven-year personal income tax plan to parliament insisting it is “fiscally responsible”.
“Because a stronger economy delivers more revenue to the budget, we are able to responsibly afford the personal income tax plan for working ns,” Mr Morrison told MPs on Wednesday.
The package was a key feature of Mr Morrison’s third budget handed down on Tuesday, and is a three-stage plan that kicks off in the first year with a low and middle-income tax offset of up to $530.
Also from July 1, the 32.5 per cent tax bracket threshold will be increased to $90,000, from $87,000, which save 210,000 people from having to pay 37 cents in the dollar due to bracket creep.
More changes are planned in 2024/25, when the government proposes abolishing the 37 per cent tax bracket altogether.
“Over the seven years of this plan, the government will provide tax relief to encourage and reward hardworking ns,” Mr Morrison said.
He wants the legislation passed as one package.
Leader of the House Christopher Pyne tried to break with tradition and get the parliament to debate the legislation straight away, but didn’t have sufficient voices in the house.
Earlier, Opposition Leader Bill Shorten confirmed Labor will support the initial personal tax cuts, but would wait to see more details of the seven-year overhaul of the system before making a decision.
“They want us to have a debate about a possible tax cut in the year 2024. That’s two or three elections down the track,” Mr Shorten told ABC TV.
Mr Morrison told the Nine Network the government was also still committed to reducing the company tax rate to 25 per cent from 30 per cent for all businesses despite it being stalled in the Senate.
“We’re continuing to press with that measure because we know that if businesses don’t have to pay the government more money in tax they can invest in the businesses, grow their businesses which is good employees, good for jobs,” he said.
Key crossbench senator Tim Storer has signalled he’s unlikely to change his mind and back the company tax.
“I’m not convinced … that it will be the right thing to do in terms of the stated aim of growing investment and employment and wages,” he said.
But he will support the first phase of cuts for lower and medium earners believing it will be “directly stimulatory to our GDP”.