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Budget 2024: Stage 3 tax cuts to take effect July 1

The Stage 3 tax cuts will go ahead as planned after the Albanese government made some amendments due to the cost-of-living crisis.

Coming into effect July 1, every taxpayer will benefit from a tax cut. However, those earning over $180,000 will see their tax cut reduced while lower income earners will receive more relief than previously promised by the Morrison government.

Treasury will reduce the 19% tax rate to 16% and increase the threshold for the 37% tax rate from $120,000 to $135,000.

Treasurer Jim Chalmers said the average benefit would be around $1888 a year, or $36 a week.

"Our new tax cuts for middle Australia are the biggest part of the cost of living relief in this Budget. From July 1, all 13.6 million taxpayers will get a tax cut," Chalmers said.

"And for 84% of taxpayers, and 90% of women, a bigger tax cut than they would have under the previous government. This is about rewarding the hard work of our nurses and teachers, truckies and tradies.

"And the 2.9 million people earning $45,000 or less, who would have received nothing."

The Morrison government legislated the tax cuts in 2018 when it was in power at the time. It originally proposed tax reductions for those earning $45,000 and over to take effect on 1 July 2024.

It would remove the 37% tax bracket and the 32.5% marginal tax rate be reduced to 30%. This delivered the greatest benefit to those earning $200,000 or more.

Read more: Tax cutsBudgetTreasurer Jim ChalmersTreasury