 |
| Peter Broelman |
 |
| Cathy Wilcox |
Showing posts with label Stage 3 Tax Cuts. Show all posts
Showing posts with label Stage 3 Tax Cuts. Show all posts
Saturday 3 February 2024
Sunday 23 April 2023
It doesn't come as a surprise that the federal electorate of Page sees a low return from Morrison & Frydenberg's legislated Stage 3 tax cuts
Page is a large electorate covering an area from Sapphire Beach in the south to Nimbin in the north on the coastal side, and from Nymboida in the south to the Queensland border on the inland side. The main towns include Casino, Dunoon, Evans Head, Grafton, Iluka, Kyogle, Lismore, Nimbin, Sapphire Beach and Wooli. [Australian Electoral Commission, 2023]
It is one of only two federal electorates found in the Northern River region of north-east New South Wales.
That section of Page electorate that contains Kyogle local government area (LGA) has a SEIFA Index relative disadvantage score of 910 - most disadvantaged part of the electorate. The section that takes in Richmond LGA has a SEIFA Index score of 902, Clarence Valley section a SEIFA Index score of 926 and Lismore LGA section a SEIFA Index score of 954 - the least disadvantaged score in found in the electorate.
Page electorate receives only $57 million in Stage 3 tax cuts in 2024-25, compared with the metropolitan North Sydney electorate whose residents draw in a total of $331 million in that same financial year and the largest total listed in the The Australian Institute April 2023 discussion paper.
If the discussion paper's projections hold true then around half of that $54 million in tax cuts will be received by less than 7,000 people currently living and working in the Page electorate.
The federal electorate of Richmond having a SEIFA Index disadvantage score ranging from 973 to 1,003 did not rate a mention in the discussion paper, so at this point in time we are all left to wonder what portion of the Stage 3 tax cuts come to the people of Tweed, Ballina and Byron LGAs.
According to Regional Development Australia, in 2022 the median weekly income for the est.124,5742 people who live & work in NSW Northern Rivers region was between $800 to $999. Therefore half of those in this regional workforce had weekly incomes between $0 and $799 dollars.
A total of 55 electorates (around 36% of all electorates) will receive a higher-than-average benefit from the Stage 3 tax cuts. Only four of these are Provincial or Rural seats and, importantly, each has characteristics that makes it atypical. Specifically, each of these seats either enjoys significant mining industry employment, which pushes up average earnings, or contains a large number of people commuting to capital cities…..
“Many lower-income electorates and individuals will get comparatively little from this quarter of a trillion-dollar cost to the budget and those electorates are more likely to be rural and regional.
“People living in National Party seats and in Tasmanian electorates are some of the biggest losers from Stage 3 when compared to their city counterparts.
“At the other end, high income earners are more likely to be clustered in the inner metro areas of our largest capital cities which is why inner metro electorates get the largest benefit from Stage 3.
“The Stage 3 tax cuts will cost more than a quarter of a trillion dollars to the budget, which will only put pressure on funding essential health, education and community programs outside major cities. [The Australia Institute, Discussion Paper, "Divided nation: The Stage 3 tax cuts broken down by city and country electorates", April 2023]
At the level of the individual; Around half the Stage 3 tax cuts go to those earning over $180,000, with the total plan costing more than a quarter of a trillion dollars ($254b). Those on less than $45,000 per year will get nothing from Stage 3. [The Australia Institute, media release, 19 April 2023]
According to The Guardian columnist and policy director at the Centre for Future Work, Greg Jericho, median-income earners pay up to $1,500 more in tax in 2022-23 than they did in 2021-22, while around 75% of all taxpayers will pay more tax in 2025 compared with what they did in 2022.
GRAPH: The Guardian, 20 April 2023
This should come as no surprise. However, because the temporary financial 'bridge' created by the low-middle income tax offset (LMITO) was in effect extended twice and increased once, in an effort to sow the seed of another Morrison presidential-style election victory, the collapse of that bridge under its own unsustainable weight was inevitable. A fact perhaps not at the forefront of inequalities being debated during the April-May 2022 election campaign.
Like many of Scott Morrison's policy manoeuvres, the downside was not timed to present itself until post-May 2022.
Now there is time to reflect on the fact that only those earning over $100,000 per year will see a noticeable change in take home pay under the 'flattened' personal marginal tax rate
system.
When it comes to income earners in the 25th ($40k pa) to 50th ($65k pa) percentile ranges they are just planned collateral damage, having got little enough from previous stages of the Morrison-Frydenberg long-term strategy to have those in the highest wealth percentile inherit Australia.
Marginal Tax Rate for 2024-05 and financial years thereafter.
 |
Note:
The tax exempt earned income range of 0 to $18,200 has not changed since 1 July 2012. Nor has the marginal personal tax rate for those earning between $18,201 to $35,000 changed since 1 July 2012 when it was increased by 4 cents to 19 cents for every dollar over $18,000 and, both remain unchanged in the new 2024-05 tax schedule.
From 1 July 2020 the marginal personal tax rate for individuals then earning between $37,001 to $45,000 fell to 19 cents in every dollar earned over $18,200 and remains unchanged in the new 2024-05 tax schedule.
For those with a current taxable income of between $45,001 to $120,000 their marginal personal tax rate falls by 2.5 cents to 30 cents in the dollar earned over $45,000 as they enter a different bracket in the new 2024-05 tax schedule.
While wage earners with a taxable income between $120,001 to $180,000 see their marginal personal tax rate drop by 7 cents to 30 cents in every dollar earned over $120,000 and, those with a taxable income between $180,001 to $200,000 will see their tax rate drop 15 cents to 30 cents in every dollar earned over $180,000 in the new 2024-05 tax schedule.
When it comes to annual earned income of $200,001 per year and higher, the marginal personal tax rate will be 45 cents in each dollar over $200,000. This tax rate has remained unchanged for this income group since 1 July 2006. However, as is indicated by past media reports those in the highest income brackets in this income group are nothing if not inventive when it comes to how much or how little they pay in personal income tax.
According to the former Morrison Government: "As a result of the Government’s plan, around 94 per cent of Australian taxpayers are projected to face a marginal tax rate of 30 per cent or less in 2024-25".
Some of the assumptions on which Morrison and Frydenberg built their new tax system can be found at:
Subscribe to:
Posts (Atom)
