Earlier, the omnibus bill – that lumps together the bringing forward of tax cuts that were scheduled for two years’ time but also a number of business tax breaks – breezed through the lower house.
“We are not going to stand in the way of millions of families, working people across this country getting some extra dollars in their wallet every fortnight,” Opposition finance spokeswoman Katy Gallagher said during the debate.
The government has set a time limit on debate, but is prepared to sit on Friday morning to get the bill through.
“We are bringing those tax cuts forward to ensure Australians have the help they need right here, right now, and that’s what we call on this parliament to support before they leave this place,” Prime Minister Scott Morrison told parliament on Thursday.
The Australian Taxation Office says workers will start receiving the tax relief as soon as practicable.
Shadow treasurer Jim Chalmers wrote to tax commissioner Chris Jordan on Wednesday to confirm Labor’s support for the tax cuts, which are backdated to July 1.
There is a longstanding practice that tax measures are implemented as soon as bipartisan support is confirmed.
“The ATO will work closely with providers of payroll software and employers to ensure the reduced withholding associated with the threshold changes and the increase of LITO (low income tax offset) is reflected in software as soon as practicable,” the agency said.
Earlier, Chalmers said he wanted to get the bill through to the Senate as soon as possible.
“We do acknowledge that these are serious times, we are in the deepest, most damaging recession for almost 100 years,” he told the lower house.
But the Greens say the money to implement the tax cuts could be better spent to stimulate the economy.
“Right now today, the government and Labor are funnelling tens of billions of dollars out the door that are going to go the pockets of big corporations, and are going to go to the millionaires,” Greens leader Adam Bandt told parliament.
Morrison said the top five per cent of Australian taxpayers paid a third of all tax.
“The truth is, the great majority of the income tax paid in this country is actually paid by those on higher incomes.”
The top threshold of the 19 per cent personal income tax bracket will increase from $37,000 to $45,000 backdated to July 1, while the top threshold of the 32.5 per cent income tax bracket will increase from $90,000 to $120,000.
At the same time, the low income tax offset will increase from $445 to $700.
Adjustments will be made to ensure taxpayers have the correct amount of tax withheld from their pay going forward.
“Any ‘over-withholding’ that occurred prior to the employer updating their payroll software and processes will be included in the tax assessment of the employee at the end of the income year,” the ATO said.
The low and middle income tax offset will be retained for the 2020/21 financial year and will be received after individuals lodge their tax return for the year.
-AAPJump to next article