So Albanese and his government are supposedly between a rock and a hard place with regard to the Stage 3 tax cuts due to apply from the 2024-25 year onwards.
Should these tax cuts be honoured in full? Keep in mind that it was the LNP in 2018 that was the architect of the cuts. Yes, Labor voted for them and said in the lead up to the 2022 election that they would honour them.
It is being bandied around the media that to back out of that commitment and make changes would be political suicide.
First some facts. No matter which way the media spins it, and they are trying, the Stage 3 cuts favour those on high incomes by a huge margin.
The following oft cited example, which is dead accurate, shows this in the most emphatic way.
Under Stage 3 cuts, a politician on a base salary of $211,250 will get a tax cut of $9,075. A registered nurse on $72,235 will get a tax cut of $681!
Hardly fair and hardly what a party which is supposedly the party of the working class should be associated with.
Following are some stats from 2018-19 Taxation statisics released by the ATO last year based on the tax returns of 14.3 million Australians.
• 2 per cent of those required to pay tax earned more than $211,365. Only 3 per cent earned more than $188,667.
• 66 Australians who earned more than $1 million paid no tax in 2018-19. It was 73 for the previous financial year.
• 156 people reported an income between $500K and $1 million.
• 51.2% of tax revenue for 2018-19 came from individual income tax.
• 21.1% of tax revenue for 2018-19 came from company tax.
• 3.5 per cent of Australian taxpayers fall into the current top income tax bracket by earning more than $180,000.
• 41.7 per cent of taxpayers earned between $37,001 and $90,00.
• 40 per cent of people who filed tax returns earned less than $37,000.
• More than 80 per cent of people filing tax returns earned less than $90,000 in taxable incomes.
• The typical taxable income (typical in the sense that half earned more than it, half less) was $59,538.
• 110,613 had a taxable income greater than $350,134.
• 39,209 had a taxable income of more than $500,000. Of those 14,46 had an income greater than $1 million.
Under the Stage 3 cuts Australians earning less than $90,000 per year will be worse off while those earning more than $200,000 will be more than $9,000 better off per year!
Sources:
• https://www.abc.net.au/news/2021-06-09/typical-australian-wage-less-than-you-might-think-typical/100198488
• https://www.abc.net.au/news/2021-06-08/tax-stats-ato-millionaires-richest-poorest-postcodes/100197694
• https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Taxation-statistics/Taxation-statistics—previous-editions/
Enough of the facts!
The indisputable conclusion is that Stage 3 cuts need to be targeted to those on lower incomes yet the final stage of the cuts will significantly disproportionately benefit those on incomes of nearly 5 times the minimum wage and more than twice the average wage!
Political suicide to restructure the cuts? How so when the vast majority of Australians would get such a meagre share of the cuts as they stand now? Assuming those people were to get the vast majority of tax cuts under a Labor restructuring of the cuts would they not feel significantly inclined to re-elect Labor, other things being equal? I sure as hell think so. And don’t forget, they represent the vast majority of tax paying Australians as shown by the above ATO data.
Further, would it not be irresponsible of a government not to change a policy that is so clearly detrimental to the majority of Australians compared to the benefit these tax cuts would hand to the already well off given the changing economic circusmtances we have seen since the cuts were first proposed and since the election?
The spin against Labor that the vast majority of the mainstream media is trying to peddle is mind boggling in the extreme. Even once reliable and reputable current affairs and “news” programs seem to be descending into the abyss of center or centre right, if not straight out conservative, talking points. Not to mention the skewed platforming that is being given to the opposition. Thanks Murdoch!!
It is increasingly being left up to small independents and even comedians and citizen journalists to put forward objective facts and data.