Varun Ghosh (WA, Australian Labor Party) | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. On Wednesday, the Albanese Labor government will deliver on its promised tax cuts, so Australians keep more of what they earn. This is the latest in five rounds of tax cuts that the government is delivering, which, when fully rolled out, will see the average worker keep up to $2,800 of their wages in their own pockets every year. Can the minister outline what these tax cuts mean for working Australians and how they help manage the cost of living?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

I thank Senator Ghosh for the question, and I acknowledge him as an important member of the team that constantly advocates on behalf of and fights for tax cuts for working Australians. That's exactly what we will see on 1 July this week, when the Albanese government will deliver another tax cut to every Australian taxpayer this year, and then another one next year, adding to the first round that Labor delivered in July 2024.

On 1 July this year, on Wednesday this week, we will have another tax cut. And from 1 July 2026, we will further reduce—well, this week—the 16 per cent tax rate to 15 per cent, including for those earning under $45,000. Senator Chandler should be interested in that, even though they voted against them. And from 1 July 2027, the tax rate will be reduced further to 14 per cent. That is in addition, of course, to the very important reforms that passed this chamber last week. All of these are designed to make sure that we are doing what we can to support Australians with those cost-of-living pressures.

Our tax reform package was pro-aspiration, pro-worker, pro-investment. The working Australian tax offset will provide a permanent annual tax offset of up to $250 for every single working Australian taxpayer, automatically reducing tax liability on their income earned from working for the 2027-28 income year. The $1,000 instant deduction, with no receipts required, from 2026-27, will allow workers to deduct up to $1,000 off their taxable income without receipts. And, of course, our changes to negative gearing, capital gains tax and trusts, which don't impact the majority of people, will help fund that tax relief for more than 13 million workers.

Sue Lines (President) | Link to this | Hansard source

Senator Ghosh, first supplementary?

Varun Ghosh (WA, Australian Labor Party) | Link to this | Hansard source

These tax cuts are part of a package of reforms that will take effect on 1 July, including a pay rise for Australia's lowest paid workers, an extension of the fuel excise cut and a full six months of paid parental leave for the first time. How do the Albanese government's tax cuts work alongside this broader cost-of-living relief to support households now?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

I thank Senator Ghosh for the supplementary. The government have been focused on looking at what we can do when it comes to cost-of-living relief, and we've been providing that in a range of ways. Importantly, on Wednesday this week, every Australian taxpayer will get another tax cut—tax cuts that those opposite voted against. They were probably 'egregious' too, I imagine. The national minimum wage will increase by six per cent, and modern award wages will increase by 4.75 per cent, following our submission to the Annual Wage Review. Parents will get 26 weeks of paid parental leave, increasing from 24 weeks. Around 2.6 million Australians will benefit from indexation of a range of social security payments, rates and thresholds. Workers will also benefit from having their super paid at the same time as their salary and wages. And Australian families will get a better deal at the check-out under our new ban on excessive pricing of groceries for consumers in the food and grocery code.

Sue Lines (President) | Link to this | Hansard source

Senator Ghosh, second supplementary?

Varun Ghosh (WA, Australian Labor Party) | Link to this | Hansard source

Minister, it is disappointing that there are some in this Senate who don't support the Albanese Labor government's tax cuts. Why does the government continue to deliver tax cuts, and when will the remaining legislative tax cuts be implemented?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) | Link to this | Hansard source

On this side of the chamber, we're all about delivering real change for Australians: more tax cuts, six months of paid parental leave, making it easier for first home buyers to get into a home, stronger Medicare and keeping our kids safe online. These are the things that we've been focused on. While those opposite don't know what they stand for and what they need to be focused on, we are delivering those real, practical solutions for Australians to help them with their cost-of-living pressures and also to make sure that our services are providing care, like Medicare and aged care, in the way that Australians expect.

We'll have more tax cuts flowing through, as I said, with the working Australians tax offset and the instant tax deduction. We've made these important reforms because we know that the status quo wasn't working for every Australian. We know that we needed to make these changes so that we can set the country up to work in the interests of all Australians.