Millions of Aussies set to cop weekly pay increase as part of new budget’s tax cuts plan
Low and middle income Aussie workers are set to receive a $20 boost to their weekly pay packets after the new federal tax cut plan is locked in by parliament. See here if you’ll bank the cashback.
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Millions of low and middle income workers will receive a $20 weekly boost to their pay packets within weeks after the federal government’s tax cuts plan is locked in by parliament.
A Herald Sun analysis shows Australians earning between $50,000 and $85,000 will keep an extra $20 a week, once the Australian Taxation Office is able to change the tax rates.
If this happens by the start of November, these workers will then cash in about $373 — their backdated tax cut from July to November this year — when they file their tax returns next year, along with a one-off $1080 bonus.
Shadow Treasurer Jim Chalmers wrote to ATO commissioner Chris Jordan on Wednesday to confirm bipartisan support for $17.8bn in extra hip-pocket help.
But because the government has included the tax cuts in an omnibus bill, with a suite of business support measures, the tax office cannot put the new rates in place until Labor supports the whole package.
“The tax office have told us they can update the schedules over the coming weeks, once they are confident they will receive bipartisan support through the parliament,’’ Josh Frydenberg said.
“The expectation is that money will flow into people’s pockets before the end of the year to be spent across the Christmas period.”
Scott Morrison said he was hopeful the change would happen “as quickly as possible”.
“We know that people on lower and middle incomes will be more likely to spend it,” the Prime Minister said.
“But I’ll tell you one thing we’ll never do as a government, we’ll never tell people how to spend their own money.”
The Treasurer said the government’s advice was that delivering a bigger pro-rata weekly tax cut — instead of rebating the tax cuts owed from the first months of the financial year — would not work, given the changes in people’s incomes during the year.
His move to bring forward stage two of the government’s long-term tax plan and combine it with the $1080 one-off payment also means most workers will receive a smaller tax cut in 2021/22 then they will in the current financial year.
This could see the timing of stage three — which is due to deliver a lower 30 per cent tax rate for everyone earning between $45,000 and $200,000 from 2024/25 — become a key issue at the next federal election.
It comes as the International Monetary Fund upgraded its economic outlook, saying the global downturn would not be as deep as initially feared.
IMF chief Kristalina Georgieva said governments across the world had unleashed an “extraordinary” $US12 trillion ($16.9 trillion) in support for households and businesses to ward off the worst impacts of the coronavirus economic hit.
“The picture today is less dire,” Ms Georgieva said on Wednesday.
“The global economy is coming back from the depths of the crisis, but this calamity is far from over.”
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