Labor forces Coalition to vote on $17bn tax cut plan as Federal Election looms

Labor has passed its $5-a-week tax cut plan, forcing the Coalition to vote against the cost-of-living relief it has already labelled as a “cruel hoax”.

Labor has passed its “modest” tax cuts just a day after revealing the $5-a-day cost-of living budget measure on Tuesday.

Jim Chalmers introduced legislation to amend the Income Tax Rates Act 1986 on Wednesday morning, just 14 hours after he put the policy to Australians while handing down the government’s fourth budget.

In doing so, the government forced the Opposition, who immediately declared they would not support the measure, to vote down the Bill, giving Labor free reign to criticise the Coalition for opposing the large-scale relief ahead of the election, due by May 17.

While Coalition senators remained united in rejecting the Bill, the legislation passed 38 to 26 in a late-night sitting with the help of the Greens and crossbenchers including David Pocock, Jacqui Lambie and Tammy Tyrrell.

Treasurer Jim Chalmers introduced legislation to push through the tax cuts on Wednesday morning. Picture: NewsWire/ Martin Ollman

While the $17bn plan will only return about $5 a week to taxpayers in the 2026-27 financial year, and about $10 a week from 2027-28, the Treasurer told the chamber it was the bill relief “Australians need and deserve”.

“To stand in the way of this legislation is to vote for higher taxes on Australian workers,” he told the chamber.

“To vote against this legislation would be to stand in the way of more hard earned money staying in the pockets of every hard working Australian.”

The Coalition immediately slammed the tax cut plan after it was announced on Tuesday night, with Shadow Treasurer Angus Taylor lashing the policy as an “election bribe” and a “cruel hoax”.

However the Opposition has left the door open for its own tax cut plan, with Peter Dutton set to make a major policy announcement on Thursday when he gives his budget reply speech.

It is expected the Opposition Leader will pledge to halve fuel excise if he is elected.

The Albanese government is pushing to have its tax cut legislated as soon as possible, with an election expected to be called in a matter of days. Picture: NewsWire

Previously Greens Leader Adam Bandt said that while the minor party would not stand in the way of the support measure, the “tiny tax tweak” was a “missed opportunity to provide urgent cost of living relief, like dental into Medicare”.

Senator Lambie also supported the Bill, despite criticisms the relief was not targeted to specifically help struggling Australians.

“I won’t stop money going to the people doing it tough even if it’s only a little bit,” she said.

Mr Taylor continued the Coalition’s take down of the measure on Wednesday, listing items Australians could buy with their $5 tax cut which included: “A single lolly, a bread roll a small coin donation to a charity box, a single photocopy”.

“Because if you’re an Australian family with a mortgage, typical mortgage, you’ve paid an extra $50,000 that you didn’t expect to pay in after tax income,” Mr Taylor said.

“And the notion that this even begins to deal with the real challenges that Australian families are facing in hard working families who have got a mortgage is just nonsense. And Jim Chalmers doesn’t get that.”

Originally published as Labor forces Coalition to vote on $17bn tax cut plan as Federal Election looms