Relief seen as too small and delayed
Critics argued the bill offers only a very modest tax cut, arriving too late to materially help households facing current cost-of-living pressure.
Treasury Laws Amendment (More Cost of Living Relief)
Current status
This bill became law on Mar 27th, 2025.
Policy area
Budget, tax & economy
What does this bill do?
Australian resident taxpayers get a two-step income tax cut on earnings between $18,201 and $45,000, with the rate dropping to 15% in 2026-27 and 14% from 2027-28 onward.
Why was it introduced?
Rising living costs, bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect. and CPIA measure of price changes that the bill uses to update some Medicare levy thresholds so they do not lag behind inflation. changes would leave taxpayers with less take-home pay and push some low-income people into the Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it.. The bill cuts the 16% tax rate in two steps and lifts Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. and surcharge low-income thresholds so relief keeps pace.
Broader context
Australia already had income tax brackets and Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. settings in place, but rising living costs, bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect. and CPIA measure of price changes that the bill uses to update some Medicare levy thresholds so they do not lag behind inflation.-driven income changes were set to erode take-home pay and pull some lower-income taxpayers into the levy. After the March 2025 budget flagged more tax relief, this bill was passed and assented to within days to lift levy thresholds from 2024-25 assessments and cut the 16 per cent rate to 15 per cent in 2026-27 and 14 per cent from 2027-28.
Key criticism
The main criticism was that the bill's tax cut is too small and too delayed to make a real dent in household cost-of-living pressure, amounting to little more than a token payment. That argument was made most strongly by Coalition speakers opposing the bill, while the Greens and Kate Chaney still backed it but said the relief was limited and bigger structural tax reform was needed.
Who supported it?
Jim Chalmers MP introduced this bill. It passed with support from Labor, Greens, One Nation, Australia's Voice, some crossbench members; opposed by Liberal Party, Nationals, some crossbench members.
Introduced in House 26 Mar 2025
Passed House 26 Mar 2025
Passed Senate 26 Mar 2025 Aye 38 No 26
Became law 27 Mar 2025
Did it become law?
Yes
Became law 27 Mar 2025
Final passage
Recorded final vote
1 counted final-passage vote was recorded.
Passage speed
1 day
From introduction to the latest recorded parliamentary step
Meaning
What does this bill do?
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Australian resident taxpayers get a two-step income tax cut on earnings between $18,201 and $45,000, with the rate dropping to 15% in 2026-27 and 14% from 2027-28 onward.
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People on lower incomes can earn more before paying the Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it., with the individual threshold rising to $27,222 and the family threshold rising to $45,907 plus $4,216 for each dependent child or student.
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Older Australians who qualify for the Senior Australians and Pensioners Tax OffsetA tax offset for older Australians and pensioners that is used here to set higher Medicare levy low-income thresholds for eligible people. can earn more before paying the Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it., with the threshold rising to $43,020 for individuals and $59,886 for families.
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People without eligible private hospital coverPrivate health insurance that can help a person avoid the Medicare levy surcharge, which is relevant to the higher low-income cutoff in the bill. get a higher low-income cutoff before the Medicare levy surchargeAn extra amount some higher-income people pay if they do not have eligible private hospital cover, and the bill raises the low-income cutoff used for it. applies to reportable fringe benefits, with the threshold rising to $27,222 from 2024-25 assessments onward.
Show source excerpts
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The amendments to the Rates Act in Schedule 1 to the Bill reduce the 16 per cent personal income tax rate that applies to Australian resident taxpayers to 15 per cent for the 2026-27 income year and to 14 per cent for the 2027-28 income year and later income years. The amendments deliver tax cuts for all Australian taxpayers.
Treasury Laws Amendment (More Cost of Living Relief) explanatory memorandum -
The level of the ‘family income threshold’ referred to in subsections 8(5), 8(6) and 8(7) of the Medicare Levy Act 1986 increases from $43,846 to $45,907. For each dependent child or student, the family income threshold increases by a further $4,216, instead of the previous amount of $4,027.[Schedule 2 to the Bill, items 6, 7 and 8, the definition of ‘family income threshold’ in subsection 8(5), and subsections 8(6) and (7) of the Medicare Levy Act 1986]
Treasury Laws Amendment (More Cost of Living Relief) explanatory memorandum -
The threshold amount for families eligible for SAPTO increases from $57,198 to $59,886. For each dependent child or student, the income threshold increases by a further $4,216, instead of the previous figure of $4,027.[Schedule 2 to the Bill, item 9, subsection 8(7) of the Medicare Levy Act 1986]
Treasury Laws Amendment (More Cost of Living Relief) explanatory memorandum -
References to the individual low‑income threshold amount of $26,000 in the surcharge provisions (in sections 15 and 16 of the A New Tax System (Medicare Levy Surcharge — Fringe Benefits) Act 1999) in respect of the surcharge on reportable fringe benefits are also increased to $27,222. [Schedule 2 to the Bill, item 1, paragraphs 15(1)(c) and 16(2)(c) of the A New Tax System (Medicare Levy Surcharge — Fringe Benefits) Act 1999]
Treasury Laws Amendment (More Cost of Living Relief) explanatory memorandum
Context
Broader context for this bill
Australia already had income tax brackets and Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. settings in place, but rising living costs, bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect. and CPIA measure of price changes that the bill uses to update some Medicare levy thresholds so they do not lag behind inflation.-driven income changes were set to erode take-home pay and pull some lower-income taxpayers into the levy. After the March 2025 budget flagged more tax relief, this bill was passed and assented to within days to lift levy thresholds from 2024-25 assessments and cut the 16 per cent rate to 15 per cent in 2026-27 and 14 per cent from 2027-28.
- 2024-25
Existing Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. settings risked catching more low-income taxpayers
The bill materials say CPIA measure of price changes that the bill uses to update some Medicare levy thresholds so they do not lag behind inflation. changes and unchanged low-income thresholds would otherwise push some lower-income people into the Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. and surcharge settings for 2024-25 assessments.
Treasury Laws Amendment (More Cost of Living Relief) Bill 2025 explanatory memorandum ↗ - 25 Mar 2025
Federal budget announces more cost-of-living tax relief
Speakers introducing the bill said it built on tax cuts already rolling out and on the cost-of-living relief funded in the previous night's budget.
Hansard ↗ - 26 Mar 2025
Government introduces a bill to top up tax cuts and lift levy thresholds
The second reading speech said the measure would give extra tax relief to all 14 million taxpayers while raising Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. thresholds to keep pace with incomes and prices.
Hansard ↗ - 26 Mar 2025
Parliament passes the bill
Both houses passed the bill on the day it was introduced, clearing the way for the promised tax and levy changes to take legal effect.
Parliamentary timeline ↗ - 27 Mar 2025
Royal AssentThe final approval that turns a passed bill into an Act of Parliament and makes the changes law. makes the changes law
Royal AssentThe final approval that turns a passed bill into an Act of Parliament and makes the changes law. turned the bill into an Act, locking in higher Medicare levyAn extra charge on taxable income that helps fund Medicare, and the bill lifts the income levels where low-income people start paying it. thresholds and the staged income tax rate cuts.
Parliamentary timeline ↗ - 2026-27
First stage of the lower tax rate begins
From 2026-27, the tax rate on income between $18,201 and $45,000 falls from 16 per cent to 15 per cent.
Treasury Laws Amendment (More Cost of Living Relief) Bill 2025 explanatory memorandum ↗ - 2027-28
Second stage of the lower tax rate begins
From 2027-28 onward, the same tax bracket falls again to 14 per cent, completing the two-step cut set by the Act.
Treasury Laws Amendment (More Cost of Living Relief) Bill 2025 explanatory memorandum ↗
Legislative route
How did it move through Parliament?
House Senate
Introduced 26 Mar 2025
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Second reading opened 26 Mar 2025
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Second reading debate 26 Mar 2025
The bill reached this recorded parliamentary step.
House second reading agreed 26 Mar 2025
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
House third reading agreed 26 Mar 2025
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Introduced 26 Mar 2025
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
Second reading opened 26 Mar 2025
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
Senate second reading agreed Aye 38 No 26 26 Mar 2025
Recorded vote: 38 to 26.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
Senate third reading agreed Aye 38 No 26 26 Mar 2025
Recorded vote: 38 to 26.
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Passed both houses 26 Mar 2025
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
Assent 27 Mar 2025
The Governor-General gave Royal AssentThe final approval that turns a passed bill into an Act of Parliament and makes the changes law., turning the bill into an Act.
Key criticism
The main case against this bill
The main criticism was that the bill's tax cut is too small and too delayed to make a real dent in household cost-of-living pressure, amounting to little more than a token payment. That argument was made most strongly by Coalition speakers opposing the bill, while the Greens and Kate Chaney still backed it but said the relief was limited and bigger structural tax reform was needed.
Criticism focused more on the size and timing of relief than on the bill's basic aim.
Missed chance for broader tax reform
Some supporters said the bill does not fix the underlying problem of bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect. or deliver a larger redesign of the tax system, such as indexing thresholds or shifting more of the burden away from ordinary households.
Further sources
Votes
Recorded votes
How the bill itself passed
The chamber-passage votes come first. Expand a vote to see the party breakdown.
Passed House passed the bill
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed
House passed the bill
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Carried Senate passed the bill
Passed 38 to 26. Support came from Labor, Greens, One Nation, Australia's Voice, and minor parties and independents. Opposition came from Liberal Party and Nationals. Minor-party and independent votes were split.
Carried
Senate passed the bill
Party Aye / No
Labor 19 / 0
Liberal Party 0 / 19
Greens 11 / 0
Unknown 3 / 4
Nationals 0 / 3
Independent 2 / 0
One Nation 2 / 0
Australia's Voice 1 / 0
Earlier bill-stage votes
Carried Senate cleared second reading
Passed 38 to 26. Support came from Labor, Greens, One Nation, Australia's Voice, and minor parties and independents. Opposition came from Liberal Party and Nationals. Minor-party and independent votes were split.
Carried
Senate cleared second reading
Party Aye / No
Labor 19 / 0
Liberal Party 0 / 19
Greens 11 / 0
Unknown 3 / 4
Nationals 0 / 3
Independent 2 / 0
One Nation 2 / 0
Australia's Voice 1 / 0
Amendments at a glance
Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.
Senate
Defeated Call for billionaire tax plan
Defeated 11 to 33. Support came from Greens. Opposition came from Labor, Liberal Party, Nationals, One Nation, and minor parties and independents.
Defeated
Call for billionaire tax plan
This was a political test of whether the chamber would endorse the Greens' alternative cost-of-living package and criticism of the government’s tax cuts. The amendment was defeated, so it did not alter the bill.
Party Aye / No
Labor 0 / 18
Greens 11 / 0
Liberal Party 0 / 6
Unknown 0 / 3
Independent 0 / 2
Nationals 0 / 2
One Nation 0 / 2
Defeated Index income tax thresholds
Defeated 5 to 37. Support came from One Nation. Opposition came from Labor, Greens, Liberal Party, and Nationals. Minor-party and independent votes were split.
Defeated
Index income tax thresholds
This was a direct policy amendment to change the bill text, not just a second-reading statement. It was defeated, so the bill kept its original tax threshold settings.
Party Aye / No
Labor 0 / 18
Greens 0 / 11
Liberal Party 0 / 5
Unknown 2 / 1
Independent 1 / 1
One Nation 2 / 0
Nationals 0 / 1
This list includes amendment votes, procedural votes and votes on the bill itself.
Parliamentary debate
Who spoke, and what they said
Start here — lead voices
Sponsor speech Supports
Jim Chalmers
Chalmers strongly supports the bill, saying it delivers more tax relief and cost-of-living help to every Australian taxpayer while keeping the budget responsible.
Read in Hansard ↗ Lead opposing voice Opposes
Angus Taylor
Angus Taylor opposes the bill, arguing its tax relief is trivial and delayed while Australians' living standards have fallen badly under the government.
Read in Hansard ↗ Lead supporting voice Supports
Adam Bandt
Bandt says the Greens will support the bill and vote for it, but argues it is a tiny and delayed tax tweak that misses the chance to deliver real cost-of-living relief now.
Read in Hansard ↗ Lead non-major voice Supports
Kate Chaney
Chaney says she will back the bill because it is better than nothing and gives a short-term way to ease bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect..
Read in Hansard ↗All speeches by bloc
Labor
4 speakers · 4 support
Labor
4 speakers · 4 support
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Anthony Albanese Albanese supports the bill, saying it extends tax cuts for every Australian taxpayer and adds to the cost of living relief already delivered in the budget.
“What these tax cuts in this legislation do is build on that, once again having a tax cut for every Australian taxpayer, not just some. Together with the measures that began this financial year, they will benefit average Australians by over $2½ thousand. That's $2½ thousand extra money in their pockets.”
Read the full speech in Hansard ↗ -
Tony Burke Burke supports the bill and urges the House to vote for it because he says it will deliver tax cuts and cost-of-living relief for every Australian.
“My simple call to every member of this parliament is, if you believe there should be a tax cut for every Australian, then vote for this bill. If you believe in higher taxes, then vote no and own the consequences.”
Read the full speech in Hansard ↗ -
Richard Marles Marles supports the bill and says Labor is cutting taxes and delivering cost-of-living relief for Australians, while accusing the opposition of voting against lower taxes and opposing the measures.
“All of that has been done in the face of the opposition of the Liberal Party. Now, they drag their members into this chamber to vote against lower taxes, and they sneer at those who are receiving lower taxes, because of the amount that's being talked about—$50 a week. That is what the accumulated amount of tax cuts represents for those who we have provided tax cuts to since we have been in power. That is what they are voting against. It's the cost-of-living relief that we've been putting in place that they are challenging.”
Read the full speech in Hansard ↗ -
Jim Chalmers ★ Chalmers strongly supports the bill, saying it delivers more tax relief and cost-of-living help to every Australian taxpayer while keeping the budget responsible.
“This legislation is another important step in implementing that plan.”
Read the full speech in Hansard ↗
Coalition
3 speakers · 3 oppose
Coalition
3 speakers · 3 oppose
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Angus Taylor ★ Angus Taylor opposes the bill, arguing its tax relief is trivial and delayed while Australians' living standards have fallen badly under the government.
“I know in my electorate and the electorate of the minister for energy Australians are paying $1,300 more than was promised by Labor. This is an absolute disaster, and we know putting more supply into the system is always going to be the answer. A renewables-only strategy is never going to work, but that is the path those opposite are on, and it has been a complete disaster for our country. Australians cannot afford another three years of Labor. Australians are poorer after three years of Labor, and 70c a day in over a years' time is going to do absolutely nothing to change that.”
Read the full speech in Hansard ↗ -
Peter Dutton Dutton opposes the bill, arguing that Labor has offered Australians far too little cost-of-living help after three years of higher debt, housing pressure and inflation.
“This election will be about the difference that people make between a government that's going to continue to ramble along, put us into further debt, make it harder for families and crush small businesses, and a coalition that has a plan for our country to get it back on track. Last night in the budget, not only was this cruel hoax perpetrated on the Australian public in its offering of 70c a day in 15 months time, not only did they rack up a trillion dollars worth of debt, not only did they say to the Australian public that they don't have a clue what they're doing on housing—they rehashed the same housing policies from the last four budgets.”
Read the full speech in Hansard ↗ -
Barnaby Joyce Barnaby Joyce opposes the bill, arguing it is an afterthought that does not properly address the cost-of-living crisis, regional Australia, or the need for stronger economic and security priorities.
“Does this budget address that? I fundamentally believe that there was a belief that they were going to call an election but for the ex-tropical cyclone, and this budget became an afterthought. Nonetheless, it should be a document that gives some respect to the job that it has before them, which is to take Australia to a better place, and it is not doing that.”
Read the full speech in Hansard ↗
Greens
1 speaker · 1 support
Greens
1 speaker · 1 support
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Adam Bandt ★ Bandt says the Greens will support the bill and vote for it, but argues it is a tiny and delayed tax tweak that misses the chance to deliver real cost-of-living relief now.
“The Greens will be supporting this bill and voting for it, but we should be clear. This tiny tax-tweak budget is a massive missed opportunity for real cost-of-living relief, like getting dental into Medicare—73c a day in 15 months time won't help that much when your rent has gone up by hundreds of dollars already.”
Read the full speech in Hansard ↗
Minor parties and independents
1 speaker · 1 support
Minor parties and independents
1 speaker · 1 support
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Kate Chaney ★ Chaney says she will back the bill because it is better than nothing and gives a short-term way to ease bracket creepWhen rising wages push people into higher tax or levy settings even though their buying power has not really improved; the bill is meant to offset that effect..
“Now, I will back these tax cuts because they're better than nothing. They're one short-term way to address bracket creep. But, if the government were serious about transparency and tax reform, it would be going further and prioritising longer-term fixes.”
Read the full speech in Hansard ↗
Record
Full record
- Act title
- Treasury Laws Amendment (More Cost of Living Relief) Act 2025
- Act number
- Act No. 28, 2025
- Became law
- 27 Mar 2025
- Takes effect
- The whole of this Act 28 Mar 2025
- Registered
- 31 Mar 2025
- Administered by
- Department of the Treasury
- Final law metadata was collected from the APH progress table; commencement rows were parsed from the bill text.
- Status
- Act -- Collected from the APH bill page.
- Originating house
- House of Representatives
- 26 Mar 2025
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
- 26 Mar 2025
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
- 26 Mar 2025
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
- 26 Mar 2025
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
- 26 Mar 2025
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
- 26 Mar 2025
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
- 26 Mar 2025
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
- 26 Mar 2025
Senate · Second reading agreed to
Recorded vote: 38 to 26.
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
- 26 Mar 2025
Senate · Third reading agreed to
Recorded vote: 38 to 26.
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
- 26 Mar 2025
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
- 27 Mar 2025
Assent · Assent
Assent
The Governor-General gave Royal AssentThe final approval that turns a passed bill into an Act of Parliament and makes the changes law., turning the bill into an Act.