Workers will get hundreds of dollars back in their pockets at tax time next year after Malcolm Turnbull's full income tax cuts passed the Senate.
But people on big wages are the big winners - they will get thousands of dollars back every year once another round of cuts take effect in 2024.
"This is the most comprehensive reform of personal income tax in a generation," the prime minister told reporters in Canberra on Thursday.
"It is fair. It rewards and encourages enterprise, it encourages and enables aspiration."
Labor's pledged to repeal the final stage of the plan if it wins government at an election due by May 2019.
The $144 billion tax package got through the Senate with almost all of the crossbench supporting it, despite objections from Labor and the Greens.
There is wide support for cutting taxes on people earning up to $90,000 a year, but Labor opposed the package's third stage, which benefits people earning up to $200,000 from 2024.
Treasurer Scott Morrison told parliament step three simplified and flattened the tax system by abolishing the 37 per cent tax bracket entirely, reducing the number of tax brackets from four to three.
He said Labor had sought, by opposing the third round of cuts, to increase the tax burden on Australians by $70 billion over the next 10 years.
Shadow treasurer Chris Bowen said the government's fiscal recklessness and addiction to unfairness is starker than its ever been.
"It celebrates when it locks in $144 billion of income tax cuts when they can give no certainty, no guarantees about whether they are affordable or sustainable," Mr Bowen told reporters.
Senator Hanson conceded it was a gamble to support the entire package, having previously argued the third and final stage was unaffordable but said she was now more optimistic.
"It was the only fair thing to do," she said.
In the Senate, Labor and the Greens voiced their anger about the way in which the government had shut down debate.
Labor's Penny Wong said it was all about the coalition's "political timetable", ahead of five by-elections on July 28, rather than sound policy or fairness.
Recent polls have shown a majority of voters disagree with the tax cut for the most wealthy, but support the first two parts of the package.
Under the first of three stages in the plan, low- and middle-income earners will get tax relief of up to $530 a year from July 1.
Independent Senator Tim Storer was the only crossbencher to vote against the bill.
He issued a scathing attack on the Centre Alliance party, formerly the Nick Xenophon Team, of which he was once a member, for voting with the government.
"Today, Centre Alliance turned its back on the principles central to Nick Xenophon and the party he started," Senator Storer said.
Australian Associated Press
