Terry McCrann: Why tax, IR changes will hit middle Australia

The government’s tax and industrial relations changes are going to hit the group of Australians they are supposed to be directly helping. Here’s how.

Workplace Relations Minister Tony Burke and Prime Minister Anthony Albanese during Question Time. Picture: NCA NewsWire / Martin Ollman

The Albanese Government’s relentless attacks on every Australian continue and expand.

The two latest are in their way the most insidious and likely to have the most damaging and most sustained long-term consequences for the very Australians they are supposed to be directly helping.

These are the so-called redesign of the Stage 3 tax cuts, and the right-to-disconnect, wrapped up in the overall anti-business, anti-productivity and so ultimately anti-worker ‘back-to-the-1970s’ industrial relations changes.

Both mine that old ‘them and us’ class hatred. To take from the rich and the bosses, to give to the poor and the workers.

If you earn more than $145k, you are one of the undeserving rich, deserving only a tax hike.

No, within the Prime Minister’s big lie – there will be no change to Stage 3 – is an even more offensive small lie. That everyone still gets a tax cut.

No, anyone earning more than $145k is getting a tax hike.

This would be clear and undeniable if the changes couldn’t get into law before July. Then, when they were finally legislated, people earning more than $145k would see their weekly tax go up.

But those earning less than $145k are surely getting a tax cut?

Yes, an immediate handout – to barely compensate for all the Albanese-forced cost increases in their lives.

But at the price of locking them – all of them – into bracket creep, stealing more of their income, forever, year after year. Until the next handout to buy their voting affection.

No, bracket creep doesn’t only apply to those earning above $135k and so in the now-to-be-revived 37c tax bracket.

Yes, it’s particularly potent there, but it will also be at work, as it has always been, for those earning $45k and in the 30c bracket.

Bracket creep works viciously – ripping money from taxpayers - when so-ever their marginal rate is higher than their average rate.

That’s actually worst at lower incomes; people least affected by bracket creep are those earning more than $1m.

This is a policy designed to most directly hurt middle and low-income Australians over time, and to do it in the most financially vicious and underhand way. Buying their thanks, with some trinkets at the start.

The IR changes could not have been better designed to damage the log-term job and rising income prospects of all Australian workers, and to hurt the overall economy to boot.

What actually generates rising real incomes? One word: productivity.

What, as both RBA governor Michele Bullock and her economics head Marion Kohler, have stressed, allows higher wages without stoking inflation?

One word again: productivity.

The IR changes overall directly attack business, big and especially medium and small.

The right-to-disconnect adds a particularly inane 1970s flavour; a return to a world where

everything stopped at 5pm. And the pubs shut at 6pm.

Apparently, PM Albanese and Treasurer Chalmers don’t realise that we all, but especially business, now have to live in a 24/7 connected digital world.

Add in Chris Bowen’s determination to destroy our electricity system and we are well on the path to that down under banana republic.

Originally published as Terry McCrann: Why tax, IR changes will hit middle Australia