Labor said it would back Scott Morrison's full tax cuts package if their amendments to split the government's bill fail, as they are expected to.
This means the government, which needs the support of at least four crossbenchers or Labor to get legislation through the upper house, is in the box seat to get the full package through on Thursday.
In combination with the legislated removal of the 37 per cent tax bracket in 2024-25, the Government is delivering structural reform to the tax system by reducing the 32.5 cents in the dollar tax rate to 30 cents in the dollar.
"You've got to follow the play", he said on Friday.
The second, aimed at fighting "bracket creep", would raise the top limit of the 19 per cent tax bracket from $41,000 to $45,000 from 2022/23, while the low income offset would also be increased from $645 to $700.
"What we are doing is growing the economy", Frydenberg said.
The first round of cuts reduces the annual tax bill of 10 million Australians earning up AU$126,000 by up to AU$1,080 ($740) a year.
Labor Leader Anthony Albanese.
"The fact is the economy is flatlining at the moment".
"This is a critical first step to ensure the Australian economy can grow faster", Business Council of Australia chief executive Jennifer Westacott said of the tax package.
"That's why we were arguing to bring forward stage two". The only people who are threatening to block any tax cut were government ministers who were saying they would block a tax cut today because of something that they wanted to happen in 2025.
Senator Lambie lobbied for her state's $157 million public housing debt to be erased or renegotiated in return for her support.
"I need those kids and their families off the streets in warm houses", she told reporters, according to AAP.
Centre Alliance initially boasted about securing a deal which would lower gas prices, before being forced to admit the guarantee amounted to a "draft policy".
"We note that Labor, the Greens and much of the crossbench - including Senator Lambie and Centre Alliance, all expressed concern about the impact of the stage three tax cuts on the budget and essential services and warned that public spending should not be cut to pay for them".
Senator Cormann rejected suggestions of a "special deal" with the minor party.
"Supporting the tax cuts will reward Australian taxpayers and provide a stimulus to the economy that nearly all economists have called for, including the Reserve Bank Governor", the statement reads. The central bank wants the government to boost investment on infrastructure such as ports, road and rail to further stimulate economic growth.