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Tax savings for most residents
Brodie Cowburn brodie@baysidenews.com.au
TENS of thousands of local taxpayers will pay less tax than originally expected if proposed federal government changes pass Parliament.
The changes to the previous Coalition federal government’s legislated stage three tax cuts, which have not yet been implemented, will see those earning less than $135,000 a year retain more of their money in the next financial year. Those earning more than $135,000 will still get a tax cut, but less than originally planned.
Labor plans to cut the lowest rate of tax, which applies to the first $45,000 earned by a worker each year, from 19 percent to 16 percent. The new 30 percent tax rate, which was originally set to apply to taxpayers earning between $45,000 and $200,000, will now apply to workers earning between $45,000 and $135,000. The 37 per cent rate which was slated to be scrapped will now be retained to apply to people earning between $135,000 and $190,000. The stage three tax changes will need to pass parliament to be enacted. The tax cuts take effect from 1 July.
In the Isaacs electorate - which spans from Carrum to Mentone and includes Keysborough, Dandenong South, and Moorabbin - the majority of taxpayers will keep more of their money under the new proposal.
According to the 2021 census, 85,600 out of a little more than 131,000 respondents in Isaacs earned between $300 and $3000 a week. Most of them will benefit from the proposed changes to the stage three tax cuts. Around 7500 people said they earned in excess of $3000 dollars weekly.
The Dunkley by-election on 2 March could prove to be an important test of the new policy. The federal government estimates that 87 percent of Dunkley taxpayers, or around 63,000 people, will get a larger tax cut under the new proposal.
In a statement, Prime Minister Anthony Albanese said the changes would “provide bigger tax cuts for middle Australia to help with cost-of-living, while making our tax system fairer.”
“The Albanese Government recognises the economic realities of 2024 - Australians are under pressure right now and deserve a tax cut. Labor’s tax cuts will make a real difference for 13.6 million Australians, ensuring that hard working Australians are keeping more of the wages they earn,” he said. “Scott Morrison’s tax plan was designed five years ago, before the pandemic, before the global inflation spike, before interest rate rises and greater global uncertainty. It doesn’t do enough to help those who’ve been put under the most pressure by these changing circumstances. We have found a more responsible way to ensure more people get a bigger tax cut to help ease the pressure they are under.”
The changes are a backflip by Albanese, who promised to implement the legislated tax cuts heading into the 2022 federal election.
Labor’s Dunkley candidate Jodie Belyea said the changes are a response to calls to reduce the cost of living. “Cost of living relief is the number one issue being raised with me in our local community. Low-and middle-income earners want some relief and Labor’s cost of living tax cuts will do exactly that,” she said.
