Australian gov't, opposition at impasse on 110 bln USD tax cuts

Source: Xinhua| 2019-06-25 10:38:12|Editor: Wu Qin
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CANBERRA, June 25 (Xinhua) -- The opposition Australian Labor Party (ALP) has reaffirmed its commitment to oppose the government's proposed signature tax cuts.

Anthony Albanese, the leader of the ALP, on Tuesday accused Prime Minister Scott Morrison of seeking an "argument rather than an outcome" over the 158 billion Australian dollars (110 billion U.S. dollars) tax cut package.

It came after Morrison and Mathias Cormann, the leader of the government in the Senate, revealed that they would ensure the Senate sits without a break until it votes to pass the tax changes when the parliament returns in the first week of July.

The tax plan was the signature policy of Morrison's campaign for re-election, which culminated in a victory on May 18.

Under the first stage of the plan, which was announced by Treasurer Josh Frydenberg in the budget for the financial year 2019-2020 in April, Australians who earn up to 120,000 Australian dollars (83,609 U.S. dollars) per year would pocket an extra up to 1,080 Australian dollars (752.4 U.S. dollars).

The second stage, which would not come into force until 2021-2022, would increase the income threshold under which the 32.5 percent tax rate applies from 90,000 Australian dollars (62,707 U.S. dollars) to 120,000 Australian dollars (83,611 U.S. dollars).

The final stage, slated for 2024-2025, would flatten the tax rate for everyone earning between 45,000 Australian dollars (31,354 U.S. dollars) and 200,000 Australian dollars (139,352 U.S. dollars) to 30 percent.

Albanese has announced that his party is willing to support stages one and two of the cuts if stage two is brought forward within three years but will not do so for the third, calling on Morrison to split the package into three separate bills that can be voted on independently.

"Mr Morrison just wants an argument rather than an outcome, more conflict the country doesn't need," he told Australian Broadcasting Corporation radio on Tuesday.

"The difference is whether the economy needs additional stimulus which is why we want to bring forward stage two of the tax cuts ... under their package, all workers won't get a tax cut in this term."

Following May's election, Morrison's Liberal National Party Coalition holds 77 out of 151 seats in the House of Representatives but only 35 out of 76 in the Senate.

In order to pass legislation through the Senate, the government needs the support of either the ALP or Greens -- both of which have ruled out doing so for the tax bill -- or four of the six crossbenchers.

With two from the right-wing One Nation party having sided with Labor and the Greens, Morrison must secure the support of the four remaining Senators to deliver on his biggest promise.

Any attempt by the ALP to split or amend the package in the Senate would be immediately rejected by the coalition's majority in the lower house.

Cormann told News Corp Australia on Tuesday that Labor was being "economically irresponsible and fiscally reckless."

"They are wanting to run the budget and the government from opposition, holding Australian workers who voted for lower income taxes to ransom," he said.

"The government will not split our income tax plan. We will deliver tax cuts to lower-income earners first before phasing in structural reforms to our income tax system over time in a way that is affordable, responsible and sustainable in our budget."

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