Jacqui Lambie set to support governments tax cut bill after demanding housing debt wiped

Scott Morrison has won crucial support for the government’s tax cut package, meaning some Aussies could get cash back as soon as next week.

The government is understood to have secured the votes necessary to pass a $158 billion tax cuts package for working Australians, according to reports.

Tasmanian Senator Jacqui Lambie will join the Centre Alliance’s Rex Patrick and Stirling Griff in passing the tax cuts following negotiations with the government.

Speaking on ABC radio this morning, Senator Lambie said: “Yes I will be supporting the tax cuts.”

She will support in the tax cuts in “good faith”, in the hope the government will provide her state with $157 million for housing.

“The money I’m asking for is very little in the overall scheme of things. I’m going in hard and I’m going in heavy,” she said.

Centre Alliance settled details with the government on a plan to keep rising gas prices at bay and ensure the extra tax relief isn’t chewed up by rising power costs.

“Supporting the tax cuts will reward Australian taxpayers and provide a stimulus to the economy that almost all economists have called for, including the Reserve Bank Governor,” it said in a statement.

Former Liberal senator Cory Bernardi has always backed the full package. This means the government, which needs the support of at least four crossbenchers or Labor to get legislation through the upper house, is in the box seat to get the full package through on Thursday.

If passed, the package will bring $1080 in tax relief to workers earning between $48,000 and $90,000 under stage one of the plan.

Australians who have lodged a tax return already could get the money by next week if the package is passed by the Senate.

On Wednesday, Tasmania’s housing crisis was dragged into the federal debate as Senator Lambie laid out her demands to the Morrison government.

Senator Lambie was the last holdout as the government sought to win over four of the six crossbenchers to pass its tax plan. It wants to get the legislation through the Senate on Thursday, after rushing it through the lower house.

“People in Tassie are doing it tough and for them, $1k in their back pocket now will give them some immediate relief,” Senator Lambie said in a statement on Wednesday.

“But there are thousands of Tasmanians who are on the pension, Newstart and don’t earn enough money to pay tax, and they don’t see any benefit from a tax cut.”

Tasmanians know a thing or two about having to hand back half of every dollar to the Fed Govt to cover our $157 million social housing debt. So before we talk tax relief for rich people let's talk about debt relief for Tassie. #auspol pic.twitter.com/Y3MqCF73Kq

— Jacqui Lambie (@JacquiLambie) July 3, 2019

She wants the Commonwealth to forgive her state’s $157 million social housing debt.

That’s one-thousandth of the value of the tax cuts.

Finance Minister Mathias Corman said there would be no “special deals” with crossbenchers to gain their support, but the government was “happy to engage” on issues of concern.

On Wednesday, Senator Lambie said there were thousands of Tasmanians waiting for public housing and many sleeping in cars, parks and tents in the middle of winter.

“I am sick and tired of the state government getting money for public housing every year and sending half that cheque within that week back to the federal government to pay off our debt,” she said.

“I’m going to go in hard guys, I want that public housing debt removed.

“This isn’t about doing deals. This is about doing the moral right thing to do.”

The debt was incurred between the 1950s and 1980s when the Tasmanian government borrowed money to build public housing.

Housing Minister Michael Sukkar met his Tasmanian counterpart in June and left the door open to forgiving the debt, but the state’s senior federal Liberal Eric Abetz said that would only encourage bad behaviour.

Mr Cormann continued to call on all senators to support the tax cuts.

“We are always happy to engage with senators in relation to issues of concern to them and their constituents,” he said in a statement to AAP.

Lambie has said she will withhold her vote until the debt is forgiven. Picture: Kym Smith

The Greens urged Senator Lambie to hold out.

“I’ll be there, as will be Senator (Nick) McKim, to remind her every step of the way, if she supports these tax cuts tomorrow, that she’s selling out Tasmanians,” the party’s treasury spokesman and Tasmanian senator Peter Whish-Wilson told reporters.

The government was forced to seek crossbench support because Labor won’t support the tax package in full.

Labor is hoping it can convince crossbenchers to support amendments so the second stage can happen sooner and the third stage be voted on later. It argues the third stage — set for 2024/25 — is too far off for the parliament to decide on now.

The first stage of the plan will deliver up to $1080 to low and middle-income earners when they lodge their tax returns in coming months.

The second stage tops up a low-income tax offset, meaning people earning up to $45,000 — instead of $41,000 — will have a 19 per cent tax rate. The final stage flattens the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.