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Byelections a test on tax cuts: Turnbull


The tax package got through the Senate with almost all of crossbench support, despite objections from Labor and the Greens.


The tax package got through the Senate with almost all of crossbench support, despite objections from Labor and the Greens. Photo: AAP

Prime Minister Malcolm Turnbull says voters will pass their judgment on his income tax cuts in the upcoming Super Saturday byelections.

The coalition has rejected criticism its tax plan is unfair because people on big wages will get the most benefit once a final round of cuts takes effect in 2024.

Workers will get hundreds of dollars back in their pockets at tax time next year after the federal government’s $144 billion income tax cuts package passed the Senate on Thursday.

The prime minister says voters have a choice between the government’s tax cuts and Labor’s policy to deny cuts to high-income earners at five by-elections on July 28.

“Of course, these competing tax policies will certainly be key issues in those byelections,” Mr Turnbull told ABC radio on Friday.

The later stages of the tax cuts won’t be due until 2022 and 2024, leading to questions about the state of the economy by then.

“I would love to think we would be able to bring some of these tax cuts forward if the budget enables it,” Mr Turnbull said.

Treasurer Scott Morrison said the cuts start with low- and middle-income earners from July 1.

“Then over the next seven years, those taxes come down right across the board so that 94 per cent of Australians won’t face a marginal tax rate higher than 32.5 cents,” Mr Morrison told the Seven Network.

The tax package got through the Senate with almost all of the crossbench supporting it, despite objections from Labor and the Greens.

Pauline Hanson’s One Nation votes were crucial after she changed her mind on supporting it after speaking to Finance Minister Mathias Cormann.

“The idea she has (is) that we should trial ways to better support apprentices across regional Australia,” Senator Cormann told Sky News.

“She’s asked the government to consider it, we’ve agreed to consider it.”

There was wide support for cutting taxes on people earning up to $90,000 a year, but Labor opposed the package’s third stage, which from 2024 benefits people earning up to $200,000.

That stage abolishes the 37 per cent tax bracket entirely, reducing the number of tax brackets from four to three and flattening the tax system.

Labor has promised to repeal the final stage of the plan if it wins the next election.

Mr Morrison dismissed suggestions the tax cuts were unaffordable because when they take effect the budget will be back in surplus.

-AAP

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