Stage-three tax cuts: what are they, how do they work and why do they exist?

The stage-three tax cuts will abolish the 37% marginal tax rate and lower the 32.5% tax rate to 30%, meaning people on higher incomes will pay less tax. Photograph: Jason Reed/Reuters

The stage-three tax cuts, due to come into effect in July 2024, are the third phase of the Morrison government’s legislated tax plan.

The legislation passed with Labor’s support in 2019 despite the party’s reservations, and Anthony Albanese went to the 2022 election promising no changes to what had been legislated. Since then, the treasurer, Jim Chalmers, has said the government’s position on the tax cuts has not changed.