Australia Institute says tax cuts benefit few Tasmanians
Tasmanian electorates are in for a shock with the announcement of the stage three income tax cuts from the federal government. Here’s why. >>
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Tasmanian electorates will benefit the least from the stage three income tax cuts, the Australia Institute says.
An analysis of the impact of the tax cuts shows four Tasmanian electorates in the 10 electorates across Australia which will receive the least tax relief.
Lyons will receive the least benefit, with an estimated $39m in tax cuts across the entire electorate in 2024-25, Braddon is the second-lowest likely beneficiary ($44m), Bass the third-lowest ($47m), while Franklin is 7th ($55m).
By contrast, the residents of North Sydney will share $331m in tax relief, those in Wentworth $319m and Warringah, $294m.
The tax cuts, which were passed by the Coalition government, come into effect from July 2024 and abolish the 37 peer cent marginal tax rate, reduces the 32.5 per cent rate to 30 per cent and raise the threshold for the 45 per cent tax rate to $200,000.
Unless they are modified or amended by Labor, the cuts are estimated to cost federal tax revenues an estimated $250bn over the next decade.
Prime Minister Anthony Albanese on Tuesday said the cuts would be going ahead.
“Well, I’ve said every time I’ve been asked about this for some period of time that there’s been no change in the government’s position,” he told Andrew Clennell on Sky News.
Australia Institute senior economist Matt Grudnoff says the tax cuts will mainly benefit those in wealthy areas, while stripping revenue that could be spent in those of greatest need.
“This is roughly a $10,000 handout for millionaires on the mainland and chump change for battlers in Burnie and most other parts of Tasmania,” he said.
“Tasmania will get the least from what are effectively tax cuts for rich people on the mainland.
“That’s a problem for people struggling with cost of living and for a federal budget which the government says lacks revenue for essential services in health, education, aged care and the NDIS.
“Rural and regional areas are more likely to have more lower-income earners getting little or no benefit from Stage 3.
“The Stage 3 tax cuts will widen the inequality divide between Tasmania and the mainland and between low and high income earners across the country.”
Greens Senator Nick McKim called for the cuts to be repealed.
“Labor has completely turned its back on Tasmania by proceeding with the stage three tax cuts,” he said.
“They are a direct transfer of wealth from people in Tasmania to the millionaires of North Sydney.”
You feel stuck’: Young Tasmanians struggling to access social housing“This is billions of dollars that would be far better spent on Tasmanian hospitals and schools than on the bank balances of the already wealthy.”
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