The Parliament has approved reductions in personal taxation levels that could see many people saving up to $530 a year.
Prime Minister, Malcolm Turnbull said that due to the tax cuts, all Australians would be better off.
“They will be paying less tax, and they will be rewarded for their hard work both now and into the future,” Mr Turnbull said.
He said people would now have the certainty they could earn more when they received a pay rise or worked more hours, and they would not be facing ever-increasing tax rates.
Mr Turnbull said that under the changes, 94 per cent of workers would not face a marginal tax rate of more than 32.5¢ in the dollar.
He said the legislated plan had three steps, the first of which was tax relief for middle and low income earners.
Mr Turnbull said that in 2018–19 more than 10 million taxpayers would receive tax relief, with 4.4 million people entitled to the full $530 benefit.
The Prime Minister said that in the second step, tax brackets would be lifted to protect against the impact of “bracket creep”, taking the $87,000 tax threshold to $90,000 in 2018–19 and then to $120,000 in 2022–23.
Mr Turnbull said the third step would see an entire tax bracket removed, meaning around 94 per cent of taxpayers would be projected to face a tax rate of 32.5 per cent or less.
He said the second and third stages would fix some flaws in the tax system that were killing aspiration and preventing people from being rewarded for their effort.
