Lower income earners could soon have some extra cash in their pockets, after Prime Minister Anthony Albanese today hinted at an expansion to the planned stage three tax cuts to benefit all earners.
If reported changes go ahead, it would reduce the size of the tax cuts given to those at the top, and distribute the savings to the lowest earners. Until now, the legislation offered no benefits to those who earned less than $45,000.
“Across the board, what we’re doing is looking at how we can help low and middle-income earners,” Albanese told KIIS FM earlier today.
“Middle Australia are doing it particularly tough.”
The hinted at changes could see the tax free threshold, which applies to all earners, raised from $18,200 to $19,500, a saving of $1,300. To pay for this, the top income bracket would be lowered from $200,000 to $180,000, meaning more high earners will pay the top tax rate.
The tax cuts had proven highly controversial for unfairly benefitting the highest earners, with further concerns it could create upwards pressure on inflation.
Until now, the plan had been to see the $120,001-$180,000 tax bracket removed and tax everyone earning between $45,000 and $200,000 at 30% instead of between 32.5% and 45%.
This meant that anyone earning $45,000 would see no benefit, while those taking home $200,000 would save $9,075 a year.
However some argue that the tax cuts must be cut entirely, with the Greens saying it would simply end up boosting inequality and stoking inflation.
“People earning between $50,000 and $100,000 will be the worst off under these tax cuts for the rich. They will see very little from Stage 3, and will see their mortgages go up when the tax cuts make inflation harder to control,” Acting Leader of the Australian Greens Mehreen Faruqi said in a statement issued today.
“When their caucus meets tomorrow, Labor must listen to the Greens and axe the stage three tax cuts.”
The Greens said the cuts would cost the federal government billions in lost revenue that could be better spent on directly providing cost of living support to those who need it.
Albanese has said that government MPs will meet tomorrow to consider the changes and any additional cost-of-living supports.
