Prime Minister of Australia Scott Morrison reacts during the APEC CEO Summit 2018 at the Port Moresby, Papua New Guinea, 17 November 2018. Fazry Ismail/Pool via REUTERS
By Colin Packham
SYDNEY (Reuters) – Australia’s conservative government looked set to secure the required support on Thursday to pass A$158 billion worth of tax cuts over the next decade, a fillip to an economy that is threatening to stall.
The plan was approved by Australia’s lower house of parliament on Tuesday but the government needs the support of several independents and minor parties for it to pass through the upper house Senate, where it does not have a majority.
Three independent lawmakers said after days of negotiations they would back the legislation when it came to a vote on Thursday.
“We’re going to have a bunch of people, hardworking Australians, that get a tax cut,” Senator Rex Patrick told Australian Broadcasting Corp. Radio.
About 10 million middle- and low-income earners will receive a rebate worth up to A$1,080 within a week should the bill pass as expected.
The tax cuts are a welcome relief to Australia’s central bank, which has said government action was needed to boost consumer spending in order to revive an economy that is growing at its slowest pace in a decade.
Economists have estimated the tax breaks would inject about A$7.5 billion into the economy over 2019/20, pleasing the Reserve Bank of Australia (RBA).
The RBA cut interest rates on Tuesday for the second time in two months.
The successful passage of the tax cuts would also be a major legislative victory for Prime Minister Scott Morrison.
The tax plan was the centerpiece of his re-election campaign and, after retaining power in May in what he described as a “miracle”, he said the tax legislation was his government’s first priority.
(Reporting by Colin Packham; Editing by Paul Tait)