As the Morrison government’s income tax cuts hurtle towards the final hurdle of federal parliament, the coalition is ramping up pressure on Labor to back the $158 billion package.
Treasurer Josh Frydenberg’s latest tactic is to highlight how much the nation’s lowest-earning electorates will miss out on if the plan doesn’t pass this week.
“Labor continues to stand in the way of tax cuts which would benefit millions of Australian low- and middle-income earners,” Mr Frydenberg said on Wednesday.
“Australians want lower taxes, something Labor clearly does not believe in.”
In Victoria, the electorate with the lowest average taxable income ($60,901) is Bruce in Melbourne’s south-east, held by Labor MP Julian Hill, where the coalition says people would miss out on $15,348 over a decade.
The lowest-earning electorate in NSW is Blaxland in western Sydney ($62,057), held by Labor’s Jason Clare, where the government says people would miss out on $15,516 over 10 years.
The three-stage tax plan has passed the House of Representatives and is heading for the Senate on Thursday.
Labor is hoping it can convince Senate crossbenchers to support its amendments to the tax package, so that the second stage can happen sooner and the third stage can be voted on later.
Labor argues the third stage of the plan – set for 2024/25 – is too far off for the parliament to decide on now.
“This is a very significant change being proposed by the government; it is more than half-a-decade off into the future and they say we’ve got to vote on it this week,” Labor leader Anthony Albanese said.
But the government appears to be moving closer to a deal which would see the whole package passed before parliament rises.
This could result in Australians earning up to $90,000 receiving an extra $1000 back in tax within weeks, but the coalition needs the support of four out of six crossbenchers to succeed.
Centre Alliance MP Rebekha Sharkie supported the bill in the lower house, but said her two senate colleagues were still negotiating with the government on ways to reduce gas prices.
Centre Alliance senator Rex Patrick said the minor party was working through the finer details of a deal to make sure extra money in taxpayers’ pockets doesn’t get swallowed up by higher power bills.
Former Liberal Cory Bernardi also backs the tax relief package, leaving the government just one vote short.
Returning Tasmanian senator Jacqui Lambie is likely to be the deal maker or breaker, but she’s yet to declare her hand.
The first stage of the plan will deliver up to $1080 to low and middle-income earners when they lodge their tax returns in coming months.
The second stage will top up a low-income tax offset, which means more people – earning up to $45,000 instead of $41,000 – will get a 19 per cent tax rate.
The final stage flattens the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.