The majority voted in favour of a motion to pass the bill in the Senate. In parliamentary jargon, they voted to read the bill for a third time.

What happens now?

Since some amendments were added to the bill in the Senate, the bill will now return to the House of Representatives, where our MPs will decide on whether they agree with the changes. If they do, then the bill will become law. If they don't, it will return to the Senate where our senators will decide on whether to insist on the amendments (which means the bill fails) or not (which means the bill will become law).

What does this bill do?

According to the bills digest:

The Government announced its Personal Income Tax Plan (PITP) in the 2018–19 Budget. The PITP reduces personal income taxes over the next seven years through a combination of changes to tax offsets for low and middle income earners and changes in income tax thresholds. The changes will be implemented over three steps, commencing in 2018–19, 2022–23 and 2024–25. The 2018–19 changes are targeted at low and medium income earners, with the changes in 2022–23 and 2024–25 applying to individuals on higher taxable incomes.

The Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 (the Bill) seeks to implement all components of the PITP. The PITP will be implemented in three steps, commencing in the 2018–19, 2022–23 and 2024–25 income years.

  • Step one in 2018–19; introduces the new Low and Middle Income Tax Offset (LAMITO) – a non-refundable tax offset of up to $530 per annum for individuals earning up to $125,333:
  • the LAMITO will only apply in the 2018–19, 2019–20, 2020–21 and 2021–22 income years

  • from 2022–23 subsequent changes to income tax thresholds will ‘lock-in’ these tax reductions for these individuals

  • the top income tax threshold for the 32.5 per cent tax rate will also be increased from $87,000 to $90,000 from 2018–19.

  • Step two commencing in 2022–23; increases the maximum rate of the existing Low-Income Tax Offset (LITO) from $445 to $645 per annum. The top income threshold for the 32.5 per cent rate will be increased from $90,000 to $120,000 and the top income threshold for the 19 per cent marginal rate will increase from $37,000 to $41,000 and

  • Step three commencing in 2024–25 will extend the 32.5 per cent tax rate up to taxable income of $200,000, abolishing the 37 per cent marginal tax rate entirely. The 45 per cent marginal tax rate will be retained, meaning income in excess of $200,000 will be taxed at 45 per cent, as is currently the case for income in excess of $180,000.

Votes Passed by a small majority

Nobody rebelled against their party.

Party Votes
Cory Bernardi SA Australian Conservatives Yes
Australian Greens (89% turnout) 0 Yes 8 No
Richard Di Natale Victoria No
Sarah Hanson-Young SA No
Nick McKim Tasmania No
Lee Rhiannon NSW No
Janet Rice Victoria No
Rachel Siewert WA No
Jordon Steele-John WA No
Peter Whish-Wilson Tasmania No
Andrew Bartlett Queensland Absent
Australian Labor Party (88% turnout) 0 Yes 22 No
Catryna Bilyk Tasmania No
Carol Brown Tasmania No
Anthony Chisholm Queensland No
Jacinta Collins Victoria No
Patrick Dodson WA No
Don Farrell SA No
Alex Gallacher SA No
Kristina Keneally NSW No
Chris Ketter Queensland No
Kimberley Kitching Victoria No
Gavin Marshall Victoria No
Jenny McAllister NSW No
Malarndirri McCarthy NT No
Claire Moore Queensland No
Deborah O'Neill NSW No
Louise Pratt WA No
Lisa Singh Tasmania No
David Smith ACT No
Glenn Sterle WA No
Anne Urquhart Tasmania No
Murray Watt Queensland No
Penny Wong SA No
Doug Cameron NSW Absent
Kim Carr Victoria Absent
Helen Polley Tasmania Absent
Centre Alliance (0% turnout) Absent
Stirling Griff SA Absent
Rex Patrick SA Absent
Nigel Scullion NT Country Liberal Party Yes
Derryn Hinch Victoria Derryn Hinch's Justice Party Yes
Sue Lines WA Deputy President No
Fraser Anning Queensland Independent Yes
Lucy Gichuhi SA Independent Yes
Steve Martin Tasmania Independent Yes
Tim Storer SA Independent No
Fraser Anning Queensland Katter's Australian Party Absent
David Leyonhjelm NSW Liberal Democratic Party Yes
Liberal National Party (100% turnout) 2 Yes 0 No
Matthew Canavan Queensland Yes
James McGrath Queensland Yes
Liberal Party (83% turnout) 19 Yes 0 No
Eric Abetz Tasmania Yes
Simon Birmingham SA Yes
Slade Brockman WA Yes
David Bushby Tasmania Yes
Michaelia Cash WA Yes
Richard Colbeck Tasmania Yes
Mathias Cormann WA Yes
Jonathon Duniam Tasmania Yes
David Fawcett SA Yes
Concetta Fierravanti-Wells NSW Yes
Mitch Fifield Victoria Yes
Ian Macdonald Queensland Yes
Jim Molan NSW Yes
James Paterson Victoria Yes
Marise Payne NSW Yes
Linda Reynolds WA Yes
Anne Ruston SA Yes
Zed Seselja ACT Yes
Dean Smith WA Yes
Lucy Gichuhi SA Absent
Jane Hume Victoria Absent
Arthur Sinodinos NSW Absent
Amanda Stoker Queensland Absent
National Party (67% turnout) 2 Yes 0 No
Barry O'Sullivan Queensland Yes
John Williams NSW Yes
Bridget McKenzie Victoria Absent
Nick Xenophon Team (100% turnout) 2 Yes 0 No
Stirling Griff SA Yes
Rex Patrick SA Yes
Pauline Hanson's One Nation Party (150% turnout) 3 Yes 0 No
Brian Burston NSW Yes
Peter Georgiou WA Yes
Pauline Hanson Queensland Yes
Scott Ryan Victoria President Yes
Brian Burston NSW United Australia Party Absent
Totals (89% turnout) 36 Yes – 32 No