Labour To Proceed with Stage Three Despite Budget Woes

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The Stage-Three Tax Cuts is the third phase of the Morrison government’s legislated tax plan. It is scheduled to take effect in July 2024 but has been under heavy criticism. The government remains unfaced and remains resolute on its election promise regarding this.

As a review, the 2019 tax plan had three stages. As Guardian Australia’s political reporter Amy Remeikis wrote, “Stage one was a low- and middle-income tax offset (Lmito) worth up to $1,080 a year to taxpayers earning between $30,000 and $126,000. Stage two, which was brought forward from 2022 to 2020 when the Lmito was extended for another two years, raised the 32.5% marginal tax bracket from $37,001-$90,000 to $45,001-$120,000 and the threshold for when the 37% tax rate kicked in was raised from $90,000 to $120,000.”

Stage three abolishes the 37 per cent marginal tax bracket while lowering the 32.5 per cent marginal tax rate to 30 per cent. Thus, this tax plan was the Coalition’s attempt to stimulate the economy through tax cuts. However, this has been heavily criticised because it is estimated to cost the budget $243 billion in lost tax revenue over ten years after its introduction.

However, according to treasurer Jim Chalmers, the government’s position still hasn’t changed. But according to acting Greens leader Larissa Waters, the position is absurd. “The Greens will use our balance of power position in the parliament to continue to fight against Labor’s unfair and irresponsible stage-three tax cuts. We demand strong social services, not decades of entrenched economic inequality,” she noted.

Waters added, “Instead of pointing the finger at the dwindling proportion of tax revenue from working families, they should axe the stage-three tax cuts to raise revenue to fund the services all people deserve.”

But according to Chalmers, the tax plan is one of the fundamental ways the government can help Australians during difficult times, as the cost of living puts pressure on the country. He added that the government understands the stress and is acting responsibly to help alleviate it.

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