Scott Morrison says package is a win for ‘hardworking Australians quietly going about their lives’

Scott Morrison has declared the passage of the government’s $158bn tax cut package through the Senate a victory for “quiet Australians”, after Labor capitulated and joined the Coalition to vote for the 10-year plan.

Speaking after the package passed with only the Greens voting against it, the prime minister said parliament had voted to “reward aspiration”.

“This is a win tonight not for the government, not for the Liberal or National parties, this is a win for those hardworking Australians quietly going about their lives,” Morrison said.

“These are the people we will keep our faith with every single day, I said we would burn for them, and that is exactly what we have been doing this week and we will do every single day and week between now and the next election.”

The Coalition’s tax plan was supported by Labor even though the party had argued it was “irresponsible” to lock in benefits for higher income earners.

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Regardless of Labor’s position, the Coalition had secured enough support from the Senate crossbench to legislate the 10-year plan after striking a deal with Tasmanian senator Jacqui Lambie and the Centre Alliance..

The bill passed the Senate shortly after 7pm on Thursday, paving the way for the tax cuts to flow from the end of next week.

The Labor leader, Anthony Albanese, said that despite Labor’s concern that the bill locked in unaffordable tax cuts from 2024-25, the shadow cabinet had decided it would not stand in the way of relief for “working Australians”.

“We do not want the circumstances whereby an economy that’s struggling prevents people getting a tax benefit of up to … $1,080,” Albanese said.

The opposition had tried to force the government to split the legislation, urging the crossbench to support its bid to bring forward the second stage of the tax cuts and defer the third stage that would flatten the tax rate to 30% for all workers earning between $45,000 and $200,000.

Labor opposed the third stage because about a third of the $95bn cost would flow to workers earning more than $180,000.

The opposition had spent much of the week attacking the government for the final stage of the tax plan but the shadow treasurer, Jim Chalmers, said the party had to “prioritise” once it became clear its amendments would not be supported.

“When it becomes unlikely that you can get everything you want … you need to prioritise what’s most important to you and that’s what we’ve done here,” Chalmers said. “We won’t oppose the full package if it comes to the Senate unamended because our highest priority is to make sure that Australians do receive that tax cut next week.

“Our highest priority throughout has been to get money into the hands of workers and circulating through a weak economy.”

Albanese said the party reserved its right to repeal the third stage of the package, but would be reassessing its position before the next election based on economic circumstances at the time.

It will also decide if it will maintain its pre-election pledge to repeal previous legislation that abolished the 37% tax bracket and put in place a 32.5% tax rate for everyone earning between $41,000 and $200,000.

“We’ll take into account all of the fiscal conditions, all of the economic conditions, we won’t prioritise one thing over another – we’ll take all of it into account and we’ll come up with the right and responsible policy for the future,” Chalmers said.

The Greens seized on the decision to accuse Labor of destroying Australia’s progressive tax system, and said its decision to side with the government left the minor party as the only “real opposition”.

“By voting for $158bn in revenue cuts that will hurt people doing it tough and line the pockets of millionaires, Anthony Albanese has abandoned the mantle of opposition leader,” the Greens leader, Richard Di Natale, said. “What’s the value of the Labor party if they are simply a paler version of the Morrison government?”

Speaking in the Senate on Thursday night, Labor’s Penny Wong said the party still believed it was “irresponsible” to support stage three of the tax package, accusing the government of holding tax cuts for low- and middle-income earners “hostage”.

The Greens and Labor both demanded the government release details of the deals done with Lambie and Centre Alliance to secure their support, which gave the government enough votes to pass the package.

Centre Alliance senator Rex Patrick said the government had given the minor party an undertaking that gas prices would fall to $7 a gigajoule or less, down from the current $9 a gigajoule.

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After claiming he had a written agreement on gas market changes, Patrick was forced to clarify that he had a “draft policy document” that outlined the government’s response but no formal guarantee.

“We are now quite satisfied the government is moving in a really good direction in relation to gas prices,” Patrick said. “That’s the status of things, there is no written agreement that says ‘you do this and we will support tax cuts’.

“There is a dialogue that’s taken place, there are emails that have been exchanged, there’s a draft policy document that … [but it] would be irresponsible to table something that is in draft, that is not fully considered.”

According to Centre Alliance, the government will announce changes to the domestic gas security mechanism to deal with current pricing, market transparency measures, measures to deal with the monopoly nature of east coast gas pipelines and longer-term measures to ensure future gas projects deliver surplus supply to the Australian market.

Labor’s energy spokesman, Mark Butler, called on the government to deliver “clear detail” of the deal with Centre Alliance and explain what it would do if manufacturers could not source gas at the price promised by the government.

Lambie said she had a “goodwill” undertaking from the government that it would wipe Tasmania’s social housing debt, which costs the state $15m in interest repayments each year.

The passage of the tax bill marks a significant victory for the Coalition. The finance minister, Mathias Cormann, said it would ensure tax payments could be paid as early as next week.

“Today is very good news for millions of working Australians who will get to keep more of their own money, because the Senate will vote in support of what was a core election commitment of the government at the last election,” Cormann said.