Extra cash could be in your bank soon after government caves to Jacqui Lambie’s demands 

Millions of Australians could have extra cash in their bank accounts as soon as next week with the government caving in to crossbencher Jacqui Lambie’s list of demands.

Prime Minister Scott Morrison won the May election by vowing to give out  $158billion worth of tax cuts to more than 10million Australians. 

Low and middle-income earners are set to receive up to $1,080 in relief when they lodge their tax returns this year, as part of stage one of the three-part package.

Senator Lambie from Tasmania was the last to hold out as the government sought to win over four of the six crossbenchers to pass the plan, announced in the April Budget.

It is understood the outspoken Tasmanian senator committed to supporting the plan in full following negotiations with South Australian Centre Alliance senators Rex Patrick and Stirling Griff and the government’s ­Senate leader, ­Finance Minister Mathias Cormann on Wednesday afternoon, The Australian reported.

Senator Lambie wanted the commonwealth to write off Tasmania’s $157million social housing debt. 

‘I’m going to go in hard guys, I want that public housing debt removed,’ she said ahead of the negotiations on Wednesday.

‘People in Tassie are doing it tough and for them, $1,000 in their back pocket now will give them some immediate relief.

‘But there are thousands of Tasmanians who are on the pension, Newstart and don’t earn enough money to pay tax, and they don’t see any benefit from a tax cut. 

‘This isn’t about doing deals. This is about doing the moral right thing to do.’ 

The debt was incurred between the 1950s and 1980s when the Tasmanian government borrowed money to build public housing.

The government has courted crossbench senators because the Labor Opposition is opposed to stage three of the package, that proposes from July 2024 to slash Australia’s tax brackets from five to four for the first time since 1984.

The Coalition also wants to abolish the 37 per cent tax bracket and replace it with a 30 per cent rate, so someone earning $200,000 a year pays the same tax rate as a worker on $45,000 a year.

While Senator Lambie is committed to passing the tax cuts package, on Thursday morning she expressed misgivings about stage three, which will cost the Budget $95billion during a time when the economy is growing at the slowest pace since the global financial crisis.

‘I’m not an economist but I’m not sure we’re heading in the right direction and I’m sure from public perception and whatever else when it gets to that, if we just don’t have the money to do that, that deal will have to go wayside,’ she told reporters in Canberra. 

Although the government is pulling out all stops to get the laws passed this week, Centre Alliance’s Rex Patrick told Australian Associated Press he wasn’t bothered if it took longer because ‘people will still get their tax cheques’.

Labor has been hoping it could convince crossbenchers to support amendments so the second stage can happen sooner and the third stage be voted on later.

It argued the third stage – set for 2024/25 – was too far off for the parliament to decide on now.

The federal government has been fighting for support to get its $158 billion tax package over the line, which would give low and middle-income earners up to $1080 when they lodge their tax returns this year.

The first stage of the plan will deliver up to $1080 to low and middle-income earners when they lodge their tax returns in coming months.

The second stage would top up a low-income tax offset, meaning people earning up to $45,000 – instead of $41,000 – would have a 19 per cent tax rate.

The final stage would flatten the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.

The $158 billion package passed the lower house on Tuesday night after about three hours of debate, with Labor failing to secure an amendment to bring forward the second stage of the package from 2022 to 2019.