Income tax cuts: Mal’s bucks party wins voters $530
PRIME Minister Malcolm Turnbull says voters will pass their judgment on his income tax cuts in the upcoming Super Saturday byelections.
NSW
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PRIME Minister Malcolm Turnbull says voters will pass their judgment on his income tax cuts in the upcoming Super Saturday byelections.
“I would love to think we would be able to bring some of these tax cuts forward if the budget enables it,” Mr Turnbull told ABC radio on Friday.
The 63-year-old prime minister, who will be 69 when the final tax cuts are due, said he planned to stay in the job while he could.
“As long as I’m doing a good job, I want to be prime minister,” Mr Turnbull told 3AW radio.
The prime minister says voters have a choice between the government’s tax cuts and Labor’s policy to deny cuts to high-income earners at five by-elections on July 28.
Labor has promised to repeal the final stage of the plan if it wins the next election.
“Of course, these competing tax policies will certainly be key issues in those by-elections,” Mr Turnbull said.
More than 10 million Australians will receive a tax cut of up to $530 next year after Mr Turnbull yesterday achieved a major legislative victory in the Senate, passing what he called the “most comprehensive reform of personal income tax in a generation”.
Despite Labor’s attempts to sabotage the passage of the bill, which included funding misleading robo-calls against One Nation leader Pauline Hanson for voting for it, the Turnbull government secured 37 votes to 33 in the Senate in a historic vote yesterday.
The immediate winners from the government’s tax victory will be workers who are earning between $50,000 and $90,000.
They will get a cheque when they file their tax returns for the 2018-19 financial year of up to $530.
The tax bracket of $87,00 will be lifted to $90,000, meaning all workers earning over this amount will pay $135 less tax.
By 2023, the tax brackets will lift again to protect Australians from “bracket creep” with the $90,000 tax threshold moving to $120,000, providing a tax cut of up to $2025, while the $37,000 tax bracket will lift to $41,000, giving low-income earners a cut of $645 a year.
The third stage, in six years’ time, will abolish a tax bracket entirely, with the top tax bracket of 45 per cent starting at $200,000.
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The rate between $120,000 and $200,00 will be 32.5 per cent.
Mr Turnbull said families will be able to keep more of the money they earn as a result of his tax reform.
“It means that from next year, middle-income Australian families with two parents, each working in middle-income jobs, will have over $1000 returned in a tax offset,” he said.
“As the whole plan rolls out to 2024-25, we will get to the point where 94 per cent of Australians will not have to pay more than 32.5 cents on every extra dollar they earn.”
The Prime Minister rejected criticism his plan was unfair, saying workers earning above $200,000 on the highest 45 per cent tax bracket will pay “a larger share of personal income tax receipts than they are today.”
The quick passage of the tax plan through Parliament enraged Labor, with the party’s treasury spokesman Chris Bowen claiming the government had held “the Senate to ransom, held the tax cuts hostage”.
Labor supports the first stage of the three-part plan, but wants to replace the second two parts with bigger relief to low- and middle-income earners and none to those earning over $95,000.
Labor leader Bill Shorten and Mr Bowen have pledged to repeal tax cuts for workers earning over $95,000, claiming it was unfair to give $7000 a year relief to wealthy bankers but only $530 a year for low-income earners.
“We will fight the by-elections, we will fight a general election on this if necessary,“ Mr Bowen said.
But Labor has been accused of foul play as it funded robo-calls against Senator Hanson in the Queensland seat of Longman, where there is a by-election on July 28, warning she was about to give a tax cut to the wealthy.
A furious Ms Hanson said she felt “bullied” by Labor and was committed to giving hardworking Australians — electricians, plumbers, nurses and welders — tax cuts.
“Bill Shorten and the Labor Party, they just don’t get it. They are forgetting about the battlers,”she said.
During the negotiations, Ms Hanson tried to strike a deal with the government for projects she cares about but Senate leader Mathias Cormann resisted her demands. However, she said she was confident the Turnbull government was moving to adopt a Petroleum Resource Rent Tax and a “use it or lose it” scheme for companies who have been hogging gas licences since the ’80s without using them.
WHAT IT MEANS FOR YOU
TAX CHANGES FROM 2018/19 TO 2024/25
From July 1, 2018
- New low- and middle-income tax offset worth up to $530 a year
- This offset will be available from 2018/19 through to 2021/22 as a lump sum after an assessment of an individual lodged tax return.
- A lift in the 32.5 per cent tax bracket from $87,000 to $90,000
From July 1, 2022
- An increase in the existing low-income tax offset from $445 to $645
- An increase in the 19 per cent tax bracket $37,000 to $41,000
- A further lift to the 32.5 per cent tax bracket from $90,000 to $120,000
From July 1, 2024
- The removal of the 37 per cent bracket
- Extending the 32.5 per cent tax bracket further from $120,000 to $200,000
WHAT IT MEANS FOR YOU FROM JULY 1, 2018
An individual on $30,000 will be $200 better off
$50,000 - $530
$85,000 - $530
$120,000 - $215
$200,000 - $135