The Senate has today passed the redesigned Stage 3 tax cuts, marking one of the most progressive Australian tax changes in decades.
The redesigned cuts will deliver an additional $84 billion to low- and middle-income earners over the next ten years, greatly improving on the original Morrison-era scheme, which would have seen taxpayers earning under $45,000 receive nothing.
The Australia Institute congratulates Labor on its decision to redesign the Stage 3 tax cuts, and congratulates the accumulative efforts of the Greens, the MPS and Senators on the crossbench and the unions and community groups who advocated tirelessly to ensure the inequitable nature of these cuts were understood.
The Australia Institute has worked for five years to overturn the original, unfair Stage 3 cuts; publishing more than 20 separate research reports and leading calls for the cuts to be redesigned.
The Australia Institute’s analysis has found that lower income electorates on the fringes of capital cities and rural areas will get the largest benefit from modifying the Stage 3 tax cuts.
“Anthony Albanese’s decision to recast Scott Morrison’s 2018 tax cuts to suit the economy of 2024 is the biggest and most honest piece of tax reform in modern times,” said Dr Richard Denniss, Executive Director of the Australia Institute.
“The Labor Party and the parliament should be congratulated on modifying the Stage 3 tax cuts. They have prevented a terrible tax cut that would have overwhelmingly gone to high income earners and made inequality worse. Instead, we will see more money flow to low- and middle-income earners who need it the most,” said Matt Grudnoff, Senior Economist at the Australia Institute.
“The new Stage 3 cuts are not only now fairer but have preserved our progressive income tax system. They will benefit most those who have been hit hardest by the cost of living rises of the past two years and will illustrate the benefits of progressive policy reform,” said Greg Jericho, Chief Economist at the Australia Institute.