• Hannah Phillips

This Week in Parliament

Parliament resumes this week for a two week session before the long winter break and the focus will be on the Senate and the future of the two tax bills.

It’s unlikely that the corporate tax cuts will pass the upper house in the next fortnight but the personal income tax cuts are another matter.

At the moment the Senate is all over the place on the personal income tax cuts.

The government bill proposes three phases of tax cuts stretching out to mid-2024.

Phase 1 proposes to give a tax cut of $530 to 4.4 million taxpayers earning between $48,000 and $90,000, starting on July 1 this year.

Labor and the crossbenchers support this cut but the Greens are opposed to it.

Phase 2 lifts the 19% threshold from $37,000 to $41,000 and lifts the top threshold from for the 32.5% rate from $90,000 to $120,000.

At present Labor is yet to make its mind up about this cut.

The final phase, which is scheduled to kick in in in mid-2024, abolishes the 37.5% rate.

This will mean that incomes up to $200,000 will pay a rate of 32.5% and above that the rate will be 47%.

Labor, the Greens and most of the crossbenchers are opposed to the final phase of cuts.

Labor voted for all the government’s cuts in the House of Representatives but it proposes to introduce a bill of its own in the Senate that will provide for tax cuts of $980 for taxpayers earning up to $90,000.

If the bill is not supported in the Senate then Labor will move to have the government’s bill amended by having the schedules that provide for phase three of the cuts and possibly phase two of the cuts deleted from the bill.

The Greens are crucial to this process because, without their support, Labor will be unable to split the bill.

However their intentions are unclear and they may simply decide to vote against the government’s omnibus bill rather than agree to support the first phase of the cuts.

In this event Labor’s motion to split the bill will fail.

If the Greens come to the party then it will be line ball whether the Labor motion will pass.

The South Australians, Tim Storer and Centre Alliance Senators Stirling Griff and Rex Patrick, have agreed to support splitting the bill.

Even if the proposal to split the bill passes the Senate then it is likely that the government will reject it when it comes to the lower house.

This will result in a stalemate where the government will accuse Labor and the Greens of refusing to give low paid workers a tax cut.

Labor will respond by saying that it is the government’s intransigence in refusing to split the bill that is denying voters tax relief.

In the circumstances it is the crossbenchers who are likely to change their position.

Most of them are up for re-election next year and they will opt for self-preservation on most political issues.

This will be a fine judgement but there’s a chance that a majority of them will decide to support the government’s bill.

If this is the case and the government can secure a win in the Braddon or Longman by-election then it will build on the momentum it has achieved through the budget and the resurgence in the economy.

Want to know more? Subscribe to Inside Canberra

Recent Posts

See All

Parliament Resumes

Parliament resumed on Monday under novel circumstances. Some members participated by way of video link, while others from Victoria had to spend two weeks in quarantine in order to attend parliament. T