Morrison's tax cuts plan passes lower house

Morrison’s $158 billion three-stage tax cuts plan passed the House of Representatives on Tuesday night and is now headed for the Senate.

Labor did not vote against the plan, but plans to convince crossbenchers to support its amendments in the Senate.

The opposition supports the first two stages of Morrison’s tax cuts package but is opposed to the third stage, which would see long-term structural tax changes.

Late last month, the Labor Party proposed fast-tracked tax cuts to stimulate economic activity and job creation. The opposition issued a statement urging the government to bring forward the second stage of its income tax plan from the current 2022-23 deadline to 2019-2020.

“Labor calls for the increase of the 37 per cent threshold from $90,000 to $120,000 to be brought forward to 2019-20,” said shadow treasurer Jim Chalmers.

Mr Chalmers said that if stages one and two of income tax cuts can be agreed, Labor would commit to passing them quickly and seek to defer stage three, which it described as the “most expensive and contentious portion”, until the next Parliamentary fortnight.

In the Senate, the Coalition needs the support of four out of six crossbenchers to see its package pass into law.

The first stage of the plan will deliver tax cuts up to $1,080 to low and middle-incomes earners this tax time.

The second stage will mean more people, earning up to $45,000 instead of $41,000, will get a 19 per cent tax rate, while the third stage will lower the tax rate from 32.5 per cent to 30 per cent for everyone earning between $45,000 and $200,000 from mid-2024.