Personal income tax will be cut by $144 billion over the next seven years.

The Senate has approved the Government's budget promise to progressively cut income tax, with Prime Minister Malcolm Turnbull welcoming it as a "great day". The bill passed 37 to 33.

The two One Nation senators, the two from Centre Alliance, David Leyonhjelm, Cory Bernardi, Brian Burston, Derryn Hinch and Fraser Anning all voted for the Government's plan, while Labor, the Greens and independent Tim Storer voted against the tax package who argue the cuts are unfair because they are too generous to high-income earners.

Labor's Senate leader Penny Wong said two-thirds of the benefit would go to high-income earners. Mr Turnbull insists it is "thoroughly fair". The Prime Minister argued that after the plan is implemented in seven years, those earning more than $200,000 would pay a larger share of personal income tax than they do now.

The key points of the tax package are as follows...

Income tax will be cut over the next seven years, costing the budget $144 billion in revenue
Labor, the Greens and Tim Storer were the only senators to oppose the Government's plan
High-income earners will get the biggest benefit, with someone on $200,000 getting more than $7,000 a year more in 2025.

Rick Maggi