Australia tax cuts pass: How it will affect your pay

Anthony Albanese has hailed the passage of new tax cuts as “a huge win” for the vast majority of workers from July 1 – and working women.

The Prime Minister confirmed on Tuesday night that the “cost of living tax cuts” had passed, just days before the Dunkley by-election in Victoria.

“This is a huge win for all 13.6 million Australian taxpayers. It means 84 per cent of Australians will get a bigger tax cut than they would have under the Liberals’ plan,’’ Mr Albanese said.

“Peter Dutton wants people to work longer for less, and this is a great divide in Australian politics.

“They will never stand up for low and middle income earners.”

Finance Minister Katy Gallagher also claimed the tax reforms were a victory for women, suggesting 100 per cent of women would get a tax cut and 90 per cent would get a bigger cut than originally promised.

“And we also know that it’s good for participation,’’ she said.

“So if you want to pick up an extra shift, work a few extra hours, you won’t be penalised because you will be able to keep more of what you earn.”

All workers earning up to $145,000 will secure a bigger and better tax cut than under the original Stage 3 cuts.

Hailing the reforms as delivering bigger tax cuts for the vast majority of workers, the Prime Minister revealed last month that average earners on $73,000 would see their tax cuts double to $1504.

Workers will receive more money in their weekly, fortnightly or monthly take-home pay from July of 2024 onwards.

In a nutshell, the new tax plan will introduce the following changes from July, 2024:

● Reduce the 19 per cent tax rate to 16 per cent (for incomes between $18,200 and $45,000);

● Reduce the 32.5 per cent tax rate to 30 per cent (for incomes between $45,000 and the new $135,000 threshold);

● Increase the threshold at which the 37 per cent tax rate applies from $120,000 to $135,000;

● Increase the threshold at which the 45 per cent tax rate applies from $180,000 to $190,000.

The tax cuts will provide relief for 13.6 million Australians, “ensuring that hard working Australians are keeping more of the wages they earn”.

But high income earners – people earning more than $200,000 – are the biggest losers, with a promised tax cut of $9075 slashed to $4529.

For a part-time shop assistant earning $30,000, the changes will deliver a tax cut of $354.

A nurse earning $90,000, who previously paid $21,517 in income tax, will now get a tax cut of $1929, or $160 a month.

A dual income couple working full-time with two kids with a combined income of $170,000 will receive a combined tax cut of $3608.

The government is also increasing Medicare levy low-income thresholds for 2023-24, reducing or eliminating altogether the amount of the levy paid by more than a million Australians on lower incomes.

“We have found a more responsible way to ensure more people get a bigger tax cut to help ease the pressure they are under,’’ Mr Albanese said.

Liberal leader Peter Dutton backed the tax cuts but has previously warned that voters will not “support a liar as prime minister” and that the Labor caucus had made a “fatal error” by backflipping on an election promise.

As a result of these changes, on July 1:

● All 13.6 million taxpayers will receive a tax cut – and 2.9 million more taxpayers will receive a tax cut compared to Scott Morrison’s original plan;

● 11.5 million taxpayers (84 per cent of taxpayers) will now receive a bigger tax cut compared to Mr Morrison’s plan;

● 5.8 million women (90 per cent of female taxpayers) will now receive a bigger tax cut;

● A person on an average income of around $73,000 will get a tax cut of $1504 – that’s $804 more than they were going to receive;

● A person earning $40,000 will get a tax cut of $654 – compared to nothing under the previous plan;

● A person earning $100,000 will get a tax cut of $2,179 – $804 more than they would have received otherwise;

● A person earning $200,000 will still get a tax cut, albeit a much smaller one, which will be $4529.

Read related topics:Anthony Albanese

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