This is a big deal because the Senate has usually been a firewall against tax cuts. This amendment will allow taxpayers to bring home an additional $268 in year one and $536 in subsequent years. Labor sprung the measure on GOP lawmakers, introducing it under the cover of darkness in a surprise session. Both the Greens and the crossbench supported it without any argument. The Coalition, nonetheless, stayed opposed, calling the policy a dirty “hoax” and an “election bribe.”
The overall net tax cut will provide taxpayers an average of $5 more per week. It will base a $17 billion hole in the budget. Even with its passage, the maneuver has ignited political drama between the parties, especially given the Coalition’s vehement opposition.
Coalition Criticism
The Coalition has fought tooth and nail in opposition to the tax cuts. Shadow Treasurer Angus Taylor panned it, deriding it as nothing more than a “70c a day tax cut in 15 months time.” The accusation from the party comes as Labor says the cuts would be Labor’s first weapon in an upcoming election campaign. They say this approach obfuscates more critical budgetary challenges.
Deputy Prime Minister Richard Marles condemned the Coalition’s approach as being against their earlier spirit.
"This is a Liberal party who is voting for higher taxes," said Deputy Prime Minister Richard Marles.
"I mean, frankly, Robert Menzies would be rolling in his grave," he added.
Finance Minister Katy Gallagher also called out the Coalition's decision.
"They have voted no to tax cuts for every taxpayer," remarked Finance Minister Katy Gallagher.
Political Reactions
The rushed passage of the tax cuts without any committee or floor debate in the Senate has raised suspicion on both sides of the political aisle. Shadow infrastructure minister Designs Prime Minister Richard Marles accused the Coalition of lacking principle in opposing these changes. That sentiment was paired by Finance Minister Katy Gallagher whose speech countering the Coalition’s wrecking efforts in that late-night session was lit.
"Let's hope the whole of Australia sees how you behave tonight," she declared.
In reaction to these unforeseen advances, Opposition Leader Peter Dutton will likely suggest a different fiscal plan altogether. He wants to commit to cutting fuel tax in half. This relief will be temporary – lasting for 12 months – and he’ll be announcing it during his budget reply on Thursday.
Impact on Taxpayers
This largely unheralded change to the federal budget is poised to save every taxpayer some meaningful, but not large, amount of money. The tax cut is making clear to taxpayers that they can start counting on more take-home pay beginning next year. It provides financial relief right away. The budgetary impacts over the long term are still causing them a lot of argument.
