The Albanese government's controversial tax changes have passed the House of Representatives as Labor MPs rejected a Coalition proposal to end bracket creep for good.
Labor used its majority to push through the tax changes on a vote of 94 to 48 on Thursday, rejecting multiple amendments offered by the Coalition and crossbench. The legislation ends negative gearing for existing properties, scraps the Capital Gains Tax (CGT) discount, and introduces a minimum 30 per cent tax on discretionary trusts.
However, the government also packaged these measures with a $1,000 deduction for work-related expenses and an annual $250 income tax cut, forcing the Opposition to vote against measures they supported. The Coalition unsuccessfully attempted to separate the measures before voting on the government's tax agenda.
Opposition Leader Angus Taylor said: "We support Labor's $250 annual income tax cut. We support Labor's $1,000 deduction for work-related expenses. These cost of living measures could have passed this parliament easily with bipartisan support, but tricky Labor, this tricky Treasurer has deliberately tied these measures to its toxic taxes."
Mr Taylor also attempted to amend the legislation with the Coalition's Tax Back Guarantee proposal, which would permanently end bracket creep by tying Australia's income tax brackets to inflation. This would mean taxpayers would no longer be pushed into higher tax brackets without an increase in real incomes, and it would force greater financial discipline on governments by removing the hidden tax increase of bracket creep. However, Labor MPs voted down the plan.
After the package passed the House, shadow treasurer Tim Wilson said the Albanese government was imposing $255 billion worth of "explicit and stealth taxes" that Australians never voted for. "Australian households are doing it tough right now, and they have just been told by the Albanese government that they are going to get $255 billion worth of higher taxes," Mr Wilson said. "The Albanese government have voted 11 times against lower taxes for Australians in the parliament. They have voted 11 times against amendments which would lower the tax burden and reduce income taxes on Australians. Australians know just how much betrayal there has come from this government, how many broken promises there have been, and how you can't trust this government, and how they're going to continue to increase taxes on the Australian community."
But Cabinet Secretary Andrew Charlton said the legislation showed Labor was addressing the "big challenges" Australians faced. "This is a really important piece of legislation for Australians," the Labor MP said. "This is the Albanese government delivering our fifth tax cut, cumulatively now more than $2,000 to an average Australian, and also addressing one of the biggest challenges in our country, which is the problem of housing affordability - particularly for young people who have struggled to get into the housing market."
The legislation is expected to be introduced into the Senate next week.
