The Australian Government Treasury has kindly created a an online Tax Cut Calculator which those who pay personal income tax on their wages or salaries can use to calculate how much less in tax liabilities they will have in 2024-25.
Calculation are based on an individual's annual taxable income and, starts showing varying degrees of tax relief at taxable incomes of $21,887 per annum all the way up to taxable incomes of $1,000,000 per annum.
It will also supply a comparison with this financial year's estimated annual tax liability and an individual's estimated annual tax liability in 2024-25 if the proposed amendments are passed by the House of Representatives this month.
Go to: https://treasury.gov.au/tax-cuts/calculator
Why did the Albanese Labor Government make the decision to amend the former Morrison Coalition Government tax cuts due to come into effect on 1 July 2024?
Treasury Advice on Stage 3 Tax Cuts
Overview
The upcoming Stage 3 tax cuts were designed and legislated when dramatically different circumstances were expected to unfold. Since they were legislated, the global economy has been impacted by several significant, unanticipated shocks. The COVID-19 pandemic disrupted supply chains and saw the rollout of unprecedented government support. More recently, ongoing global conflicts have led to rapid increases in energy and food prices, which are rippling through domestic prices and have contributed to inflation reaching 30-year highs.
Low- and middle-income households have been under significant pressure from unanticipated cost-of-living increases associated with the lift in prices. It is challenging to provide support to these households without unduly adding to inflationary pressures and perpetuating cost-of-living challenges.
Treasury expects inflation to return to the target band over the coming 18 months and built into this profile are the Stage 3 tax cuts. One way to provide further relief to those households most affected by cost-of-living increases and not impact inflation is to redesign the Stage 3 tax cuts.
It remains important to deliver an overall tax cut around the size of the Stage 3 tax cuts to unwind bracket creep and lower average income tax rates. This case is supported by the ongoing improvement in the budget position and adverse impacts of rising average income tax rates.
A redesign of the Stage 3 tax cuts presents other opportunities, including enhancing the participation benefits of the tax cuts, especially for women, and distributing the future impact of bracket creep more evenly. This can be achieved with the same budgetary cost as the Stage 3 tax cuts.
The redesign of the Stage 3 tax cuts outlined in this document is estimated to provide cost-of-living relief to 13.6 million taxpayers. This option is broadly revenue neutral, will not add to inflationary pressures and will support labour supply......
Read the full advice at:
https://treasury.gov.au/sites/default/files/2024-01/tax-cuts-treasury-advice.pdf
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| IMAGE: Australian Treasury |
By way of example.....
Using the 2021 Census &.id informed decisions data as guidelines for Northern Rivers Region stated annual individual incomes and relying on figures produced by Treasury's tax calculator:
in the 2024-25 financial year an est. 8.7% of all Northern Rivers local workers should see an annual tax cut somewhere between $234-$513;
with roughly 23% of local workers expected to find their annual tax liability reduced by between $468-$700;
around 14.5% can expect to have their tax liability drop by somewhere between $700-$978;
another 14.5% of local workers have annual incomes which should see their tax cut come in between $978-$1,303;
an est. 9.5% of local workers are calculated to receive a tax cut of between $1,304-$1,629;
while 7.7% of all local workers are estimated to fall within the range of between $2,279-$ 3,729 less in annual tax liability; and
est. 3.7% of all workers may see their annual tax liability cut by between $3,729-$3,889 or higher.
Note: this is not an exhaustive list of Northern Rivers local workers' expected tax cuts in 2024-05 should the House of Representatives pass the Albanese Government proposed amendments to the former Morrison Government Stage 3 tax cuts.
BACKGROUND
Northern Rivers Regional Area
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| IMAGE: .id informed decisions |
At the 2021 Census est. 116, 851 people were working part-time or full-time for a wage or salary in the seven local government areas within the NSW Northern Rivers region. [.id informed decisions, Northern Rivers Region economic profile]
In 2021 the taxable gross income of these workers ranged from est. $351 up to $3,500 and over per week.
Overall, 15.4% of the local workers earned a high income, and 16.0% earned a low income, compared with 24.6% and 11.5% respectively for NSW.
The major differences between the weekly income of the local workers in the Northern Rivers Region and NSW were:
- A smaller percentage of local workers who earned $2,000 - $2,999 (7.7% compared to 13.3%)
- A smaller percentage of local workers who earned $3,500 or more (2.4% compared to 6.2%)
- A larger percentage of local workers who earned $800 - $999 (14.5% compared to 10.9%)
- A larger percentage of local workers who earned $650 - $799 (11.5% compared to 8.1%) [.id informed decisions, Northern Rivers Region economic profile]
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