James Morrow: Stage 3 tax cuts won’t help Aussies copping other tax and excise hits

The PM says we should enjoy the generosity of his rejiggered Stage 3 tax cuts while the government plans to trouser $28 billion more of your money over the next decade. James Morrow breaks down Australia’s biggest tax scam.

Congratulations, you got a tax break. But, bad news, everything else is going up.

Such is the nature of tax in Australia, where the government trumpets putting a bit more back in your pocket before reaching back in to pluck some more of it out.

While the prime minister tells us we should enjoy the generosity of his rejiggered Stage 3 tax cuts which will give just about everyone a bit more in their pocket, this is frankly something of a scam.

Despite coming across all generous, the government will actually trouser $28 BILLION more of your money over the next decade, simply because, as our wages (hopefully) increase with inflation, we will be slugged ever more by Australia’s punishingly progressive tax system.

And that’s before you get to the excise tax on things like petrol and alcohol and tobacco which, unlike income tax, IS indexed to inflation.

Prime Minister Anthony Albanese claims the tax cuts will put more in our pockets at the same time as even more is being taken back out. Picture: NCA NewsWire / Martin Ollman

You see how this works?

The system is rigged so that inflation punishes you both when you earn your money, and when you spend it.

While Labor plays its class warfare card, they are also clipping the ticket every time someone buys a schooner or fills up at the bowser or, yes, buys a packet of smokes (which are now so far north of $50 they have created an entire illegal tobacco black market).

By the way, the Coalition is just as guilty as Labor on this front.

Income taxes were indexed to inflation for a time, but Malcolm Fraser – if only this were his greatest sin in office – ended the practice, because he realised it was more fun to give people their money back in tax cuts.

Scott Morrison halved petrol excise taxes for a time, but a plan to freeze levies on beer went down in a bar-room brawl with the spirits industry.

And of course by kicking the Stage 3 tax cuts off into the never-never, they all but ensured that Labor would be in power and undo them before they ever came to pass.

Originally published as James Morrow: Stage 3 tax cuts won’t help Aussies copping other tax and excise hits