‘Lost in translation’: Why the average Aussie will get a $1888 tax cut this year

There’s some great news for us struggling with the cost of living as the average Aussie is set to get a big tax break.

Aussies will get a big tax break this year.

Average Australian workers can expect a tax cut of $1888 according to Treasurer Jim Chalmers but the latest polls suggest it’s still not enough to keep the government out of the danger zone.

Marking the first anniversary of the Albanese Government’s big decision to revamp the original tax cuts, the Treasurer has revealed that the average tax cut is expected to be $1888. This is expected to increase to $1,944 in 2025-26.

But that’s just for average earnings. For high income earners that value of the tax cut can be as high as $4,500 a year although it was originally much higher than that until the Albanese Government tweaked it to make it more generous for middle income earners.

The combination of wage growth and tax cuts means that the average worker could see their after-tax pay rise by $2,040 between 2024-25 and 2025-26.

According to the Treasury, the average worker’s pay is expected to rise to $81,000 in 2025-26, from around $78,000 in 2024-25.

The average worker will get a tax cut of $1,704, up from $1,629 this year. That is almost double what they would have got under Scott Morrison’s tax plan.

“Every taxpayer is getting a tax cut and they’ll get even more on average in the next year under the Albanese Government,’’ Treasurer Jim Chalmers said.

“It’s a meaningful increase because it shows we’re making welcome progress on the economy after a wasted decade under the Liberals and Nationals.

“Australians are earning more and keeping more of what they earn under Labor but they would be much worse off under the Liberals.”

Aussies will get a big tax break this year.

Karl Stefanovic’s brutal question

But despite the largesse the Albanese Government remains under pressure from voters over the cost of living.

That prompted Karl Stefanovic to hit the Treasurer Jim Chalmers with the big question that is keeping the Albanese Government up at night.

During a live interview on Channel Nine’s Today show, the Treasurer was keen to spruik the benefits of the government’s decision to broaden personal income tax cuts a year ago to deliver more relief to low and middle income earners.

But as the clock ticks towards an election, Stefanovic has asked what happens if the voters defy political orthodoxy, becoming the first federal government to be kicked out of office after winning just one election since the 1930s.

“Are you guys going to be one term wonders?,” he asked.

The brutal question follows a string of opinion polls that confirm voters are warming to Peter Dutton and remain underwhelmed by the Albanese Government.

The Prime Minister Anthony Albanese. Picture: NewsWire/ Gaye Gerard

While it’s not uncommon for a first term government to lose seats after a first term, the last Prime Minister to lose office after one term was James Scullin during the Great Depression.

Just two years after a landslide victory, Labor suffered a crushing defeat in 1931.

“We don’t need opinion polls to tell us that people are under pressure, even though we’re making some pretty remarkable progress together as Australians in our economy,’’ Mr Chalmers replied.

“We’ve got inflation down and wages up and unemployment is low. But that doesn’t always translate into how people are feeling and faring in the economy.

“Saturday is the one year anniversary of the difficult decision that Anthony Albanese and I took to make sure that every Australian got a tax payer, got a tax cut, not just some. And that’s just one of the ways that we’re helping with the cost of living pressures that we acknowledge people are still feeling.

Is the government’s message ‘lost in translation’?

But the Channel Nine star observed that voters remain unconvinced.

“I think people are still feeling that it’s all a bit lost in translation,’’ Stefanovic said.

“People are still under pressure,’’ Mr Chalmers replied. “That’s why, you know, as we get closer and closer to the election, and you’re asking me for a political reflection on what’s happening in the economy, the same Australians who are worried about the cost of living would be worse off under Peter Dutton and the Coalition, because Peter Dutton’s gone after Medicare before he’ll push down wages again, he’ll push up electricity prices with this nuclear insanity and he’ll take Australia backwards.

“And so there’s a choice. At the election, we’ve been helping people with the cost of living, acknowledging the very real pressures that they confront. Our opponents would make things worse at the time.

“Our opponents said that they’d absolutely roll back these tax cuts, but it was the right decision because it meant that every Australian taxpayer got a tax cut to help with the cost of living, not just some taxpayers.”

Originally published as ‘Lost in translation’: Why the average Aussie will get a $1888 tax cut this year