Federal Budget 2019: No difference in Labor, Coalition’s tax relief promises
Labor’s budget plan has some similarities to the Coalition, and some massive differences, too. Use our online calculator to work out what it means for you.
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For anyone earning $48,000 to $120,000, there’s no difference between the tax relief on offer from Scott Morrison and Bill Shorten over the next three years.
After that, there’s a chasm.
The Opposition Leader used his Budget reply to commit Labor to paying increased refunds to most workers in their next tax return.
The bump brings Mr Shorten on par with the promise the Government made in the Budget.
That means workers on $48,000 to $90,000 can now be pretty confident of getting $1080 back from the ATO after July. Ditto next year and the year after.
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There’s also unanimity on what to give to those on $100,000 ($915) and $120,000 ($315).
Above that level, there’s nothing from Labor or the Coalition from now to 2021-22.
But Labor will take from those on $180,000-plus by reintroducing the “temporary budget repair levy” of two per cent on income beyond that level.
Even though both sides are making the same shorter-term pledges to millions of lower and middle-income earners, there remains the possibility that whoever wins the election won’t be able to muster enough support in parliament.
So don’t spend what they say they’ll give you just yet.
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Gathering backing in the Senate could be an extra challenge for Mr Morrison, if the Coalition is re-elected, because his offsets are likely to be part of bills incorporating big tax cuts in the future, firstly in 2022-23 and again in 2024-25.
The Prime Minister’s longer-term pledge is to give people additional incentive to earn more by taking less in tax — above $90,000 first off, then $120,000 in the final phase.
Mr Shorten is offering no such vision.
“We support the tax relief starting on July 1, but we won’t sign up to stages two and three which are two elections away,” a Labor source said.
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Mr Shorten went into his Budget reply already promising $95 a year more than the Government to workers on less than $37,000.
He didn’t increase that.
Labor has said it would bring back the two per cent budget repair levy on earnings above $180,000.
That would take $400 a year from a person on $200,000.
“The Budget still needs to be repaired,” Labor’s treasury spokesman Chris Bowen said on Wednesday. “The temporary return of the levy for Australians earning more than $180,000 remains our policy.”
It wouldn’t end until 2023 under Labor’s current plans.
LABOR’S OFFERING TO TAXPAYERS
SINGLES
* Bill Shorten has matched Scott Morrison on immediate tax relief for most workers.
* That means both sides are offering refunds of up to $1080 back in 2018-19 tax returns.
* That’s what those earning $48,000 to $90,000 will get; it’s $315 if you’re on $120,000.
* Labor is offering $69 more than the Coalition to those earning $40,000 a year.
* Labor hasn’t signed up to Scott Morrison’s future tax cuts and will bring back the two per cent levy on higher earners.
DINKS (50/50 INCOME)
* Labor equals the Coalition on instant tax breaks.
* The Opposition is vowing to deliver offsets worth up to $2160 per couple in tax returns.
* The most significant help goes to lower and middle-income earners. Same for both.
* But Bill Shorten won’t mirror Scott Morrison’s commitment for tax cuts in 2022-23 and beyond.
* He is bringing back the two per cent budget repair levy on those earning $180,000-plus.
SOLE PARENT
* Labor and the Coalition are offering the same tax relief from $48,000 to $120,000.
* It’s worth $1080 for workers between the low end of that range and $90,000.
* It then tapers off to nothing at $126,000.
* While not an increase on earlier commitments, Labor is $95 ahead for a $30,000 earner.
* There is no promise from Mr Shorten to cut taxes at any point in the future.
DOUBLE-INCOME COUPLE (50/50) WITH YOUNG KIDS (AGED ONE AND THREE)
* There’s up to $2160 of almost immediate tax relief from Labor — and the Coalition.
* To get that you both need to be earning between $48,000 and $90,000.
* If you’re both on about $100,000, the offset payable in your return would be $1830.
* Labor had already promised “for the first time”, subsidised preschool for 3yrs.
DOUBLE-INCOME COUPLE (67/33) WITH YOUNG KIDS (AGED ONE AND THREE)
* Both sides are vowing to provide about $2000 of relief in your next tax turn.
* That’s the case if one of you is on $90,000 and the other on $45,000.
* If one of you is on $120,000 and the other is on $60,000, you’ll get about $1400.
* Budget repair levy takes $200 of every $10,000 of individual earnings over $180,000.
* There’s relief from childcare costs through more subsidised preschool for 3 and 4yrs.
DOUBLE-INCOME COUPLE (50/50) WITH TEENS (AGED 13 AND 15)
* Bill Shorten is matching the Coalition pledge of up to $2160 of tax relief
* It is payable to any worker who earns between $48,000 and $90,000.
* If you’re both on about $100,000, the “offset” payable in your return would be $1830.
* Each on about $40,000? Labor’s offering slightly more than the Coalition
* There is no promise from Mr Shorten to cut taxes at any point in the future.
SINGLE-INCOME COUPLE WITH YOUNG KIDS (AGED ONE AND THREE)
* Both Labor and the Coalition offer up to $1080 of tax relief from July.
* That goes to anyone on $48,000 to $90,000 and comes in ATO returns.
* On $120,000? Both sides offer $315 of relief.
* Labor offers $95 more than the Coalition to those on $30,000. That’s not new.
* But Bill Shorten isn’t signing up to Scott Morrison’s future tax cuts.
* There would be more subsidised preschool under Labor.
SINGLE-INCOME COUPLE WITH TEENS (AGED 13 AND 15)
* Bill Shorten and Scott Morrison are matched for immediate tax relief for most workers.
* Labor, like the Coalition, will offer refunds of up to $1080 back in 2018-19 tax returns.
* To get that you need to be on $48,000 to $90,000; it’s $315 on $120,000.
* Labor offers $69 more than the Coalition to those earning $40,000 a year.
* Labor hasn’t signed up to Scott Morrison’s future tax cuts and will bring back the two per cent levy on higher earners.
DOUBLE-INCOME COUPLE (67/33) WITH TEENS (AGED 13 AND 15)
* Both sides are vowing to provide about $2000 of relief in your next tax turn.
* That’s the case if one of you is on $90,000 and the other on $45,000.
* If one of you is on $120,000 and the other is on $60,000, you’ll get about $1400.
* Labor offers a bit more help if the lower-income earner is on $25,000 to $45,000.
* Budget repair levy takes $200 of every $10,000 of individual earnings over $180,000.
SINGLE RETIREE
* Income from super and the pension isn’t taxed, so the offsets don’t apply.
* Labor is sticking with plans to snatch franking credit cash refunds.
* It claims to be protecting pensioners from this raid.
* Labor will spend billions on free cancer scans and MRI machines.
* Bill Shorten also vowed to cut the cost of cancer medication.
Originally published as Federal Budget 2019: No difference in Labor, Coalition’s tax relief promises
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