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Stage 3 cuts to pass House, Senate greenlights ‘right to disconnect’

Regulation

Revised tax cuts will pass the House of Representatives while the Senate has passed IR reforms including the right to disconnect and casual conversion rights.

By Christine Chen 10 minute read

Cuts to the first and second income tax brackets as part of the government’s revised tax plan are set to pass Parliament and IR reforms, including the right to disconnect, passed the Senate on Thursday. 

The proposed overhauls to the country’s tax and workplace law reforms took centre stage in the lower and upper house as the Parliament resumed sitting for the first time this year. 

On Tuesday, the government introduced the legislation retargeting its stage 3 cuts towards low and middle-income earners to provide cost-of-living relief into Parliament. 

The changes, announced last month and set to take effect from 1 July, would reduce the lowest rate of income tax from 19 per cent to 16 per cent and the second rate from 32.5 per cent to 30 per cent, applying to income up to $135,000. The highest 45 per cent tax rate would also increase to $190,000. 

Opposition leader Peter Dutton said the Coalition would attempt to amend the “bad policy” but would wave the bill through if the amendments failed to pass. 

“The Coalition is not going to stand in the way of providing support to Australians who are doing it tough,” he said after a party room meeting on Tuesday. “We are supporting this change not to support the prime minister’s lie but to support families who need help now.” 

The stage 3 tax cuts as devised by the Coalition in 2018 made winners out of higher-income earners, collapsing the 32.5 per cent and 37 per cent tax brackets into a single 30 per cent bracket and raising the threshold for the top 45 per cent tax bracket from $180,000 to $200,000.

While Mr Dutton did not elaborate on his proposed amendments, Coalition MPs told Guardian Australia that their “intent” would be to highlight Labor’s “broken promise”, likely including symbolic second reading amendments and possibly substantive amendments to tax rates and thresholds. 

Meanwhile, the rest of the government’s Closing Loopholes reforms passed the Senate with 32 votes to 29 on Thursday. 

As part of a deal with the Greens to ensure the bill’s passage, Labor added a “right to disconnect”, giving employees a legal right to ignore unreasonable emails, phone calls and text messages outside of working hours. 

Other changes included higher penalties for sham contracting, improving casual conversion rights and giving power to the Fair Work Commission to create minimum conditions on pay, penalty rates, superannuation, payment terms, record-keeping and insurance in the gig economy. 

The bill would also expand grounds for union officials to waive a 24-hour notice period to enter workplaces and investigate potential breaches of the Fair Work Act. 

The bill will return to the House of Representatives for the amendments to be approved.

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Christine Chen

Christine Chen

AUTHOR

Christine Chen is a graduate journalist at Accountants Daily and Accounting Times, the leading sources of news, insight, and educational content for professionals in the accounting sector.

Previously, Christine has written for City Hub, the South Sydney Herald and Honi Soit. She has also produced online content for LegalVision and completed internships at EY and Deloitte.

Christine has a commerce degree from the University of Western Australia and is studying a Juris Doctor degree at the University of Sydney. 

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