In January 2024, the Albanese government announced modifications to stage three that reduced the overall cost and gave larger cuts to individuals earning under $200,000.
[5] Following amendments, the final legislation passed the House of Representatives with the support of the Coalition, Bob Katter and independent MP Julia Banks.
Shadow treasurer Chris Bowen stated in April 2019 that it was "neither fair nor responsible to lock in billions of dollars of tax giveaways that disproportionately benefit a relative few - and so far into the future”.
[1] The legislation was passed on 4 July 2019, and was entitled "Treasury Laws Amendment (Tax Relief so Working Australians Keep More of Their Money)".
"[10] Labor voted for the A$158 billion dollar tax plan in both chambers of parliament, but leader Anthony Albanese stated that they had done so as not to block the earlier stages from benefiting "working Australians".
[9] In September 2020, The Australia Institute published a report stating that the majority of the stage two and three cuts would benefit the top 10% of earners.
[17] Independent members of the Australian Parliament advocated for restructuring of stage three, including Dai Le, David Pocock and Monique Ryan.
The maximum amount of LMITO is $1,080, it cannot reduce tax liability below zero dollars, and the offset cuts out when taxable income reaches $126,000.
[9][clarification needed] Stage two (part of Schedule 2) involves lifting the thresholds for the 19% and 32.5% marginal tax brackets.
The two highest brackets will be taxed at their current marginal rates, but will have higher thresholds, only applying for incomes above A$135,001 and A$190,001, compared to A$120,001 and A$180,001 before stage three.
[33][34] Greens leader Adam Bandt stated on 26 January 2024 that the changes to stage three were not sufficient for assisting low- and middle-income earners.
[39] The Australian Industry Group called for a reduction in the next minimum wage increase due to the redesign of the stage three tax cuts, arguing that workers would receive 2% more money, adding to inflationary pressures.
The Fair Work Commission previously decided in 2019 that it would not be appropriate to directly reduce the minimum wage increase that year from the Low and Middle Income Tax Offset[40]