Labor leader Anthony Albanese has confirmed the party will vote for the tax cuts on Thursday night, but left open the option of repealing future tax cuts to high-income earners.
Mr Albanese said Labor will continue its futile attempt to amend the legislation to bring forward Stage 2 and delay the Stage 3 tax cuts in 2022.
However, as first revealed by The New Daily on June 24, Labor will vote for the legislation when those amendments fail.
Labor defended the decision on the grounds it did not wish to be held responsible for holding up tax cuts now for low- and middle-income earners.
“Our first priority is that money gets into the hands of workers,” Mr Albanese said.
Labor’s position is redundant in terms of the numbers in the Senate, because Prime Minister Scott Morrison already has the votes it needs with Centre Alliance and Jacqui Lambie.
Earlier, Mr Morrison made a triumphant return to Parliament, promising action on deeming rates for pensioners, a fistful of dollars for tax cuts and “the year of the surplus”.
The PM’s first question time since the election was dominated by confirmation that the entire $158 billion tax cut plan would now pass the Senate.
The victory means 10 million Australians can expect to secure a $1080 payment when they lodge their tax returns from next week.
“We went to this election on the platform of ensuring that Australians keep more of what they earn,” Mr Morrison said.
“Our duty in this Parliament is to ensure that we keep faith with those Australians who work hard, those businesses who invest to create those jobs. Those Australians each and every day go about their business to make this country stronger.”
Asked what health and education spending would need to be cut to pay for the tax cuts, Mr Morrison responded simply: “None.”
Welcome to the year of the surplus
The Prime Minister also insisted his government would deliver a budget surplus.
“Welcome to the year of the first budget surplus in 12 years,” he said.
“What that demonstrates is responsible economic and financial management is at the core of our government.”
Mr Morrison said it was his plan to ensure that the aspirations of all Australians were recognised, respected and rewarded – “and that we enable them to pursue their aspirations”.
“On this side of the House, we join with the Australian people in celebrating aspirations, not indulging in the politics of class envy,” he said.
“Their aspirations to earn more and to keep more of what they earn will, and always will, be respected by members on this side of the House – as we have done so in introducing our bill to provide tax relief to all Australians.”
Mr Morrison was asked by Mr Albanese if he planned to do anything about pensioners’ deeming rates.
Pensioners say they are being ripped off by a “retirees tax” because the government assumes they are securing much higher rates of return for bank deposits than they are actually receiving, given the record-low interest rate environment.
“We have had a consistency in cash rate positions for some time, and it has been a record for the consistency of cash rate,” he said.
“That matter will be considered by the Expenditure Review Committee in the normal course of events. It will be done so responsibly and in accordance with the government’s overall fiscal strategy.”
The Prime Minister used the opportunity to accuse Labor of being “smug” despite its election defeat.
“It seems the smugness of the opposition hasn’t changed … despite having the lowest primary vote at the last election for the Labor Party in over 100 years,” Mr Morrison said.
“As I looked down the front bench of the Labor Party, I see the same old faces. The same old faces in the same old arrogance in the same old class envy in the same old smugness, which says ‘we don’t think Australians should keep more of what they earn’.
“They think the answer to a stronger economy is higher taxes. The Australian people don’t agree with them.”
Mr Morrison said he faced a Labor Party that had much in common with former prime minister Paul Keating and British Labour leader Jeremy Corbyn.
“They are buddies in arms, all part of the new Labor agenda which would take this country back decades and decades and decades,” he said.
“The Australian people rejected this mob. They rejected them absolutely and with good cause, because Labor’s policies – which remain unchanged – are to undercut, to douse the aspiration of hard-working Australians.”