Stage 3 tax cuts winners and losers: What Albanese government changes mean for you
Anthony Albanese will almost halve the tax cut going to Australians on $200,000 in order to deliver savings to low and middle income earners. See the full breakdown here.
NSW
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Anthony Albanese will almost halve the tax cut going to Australians on $200,000 in order to deliver savings to low and middle income earners under Labor’s changes to the stage three package.
An Australian earning $200,000 a year will get a tax cut of $4529 under Labor’s revamped stage three, compared to $9075 that would have been delivered under the original plan.
A worker on $180,000 would get a tax break of $3729, down from the $6075 originally promised.
Meanwhile, workers previously not due any tax break will all benefit from Labor’s changes, with Australians on $40,000 to get $654.
Under the original stage 3 plan a person on $50,000 was only due a $125 tax cut, but will now receive $929.
As Labor MPs gather in Canberra to be briefed on Anthony Albanese’s plan to tear up stage three tax cuts in favour of low and middle income earners, Treasurer Jim Chalmers strongly hinted at the significant change impacting taxpayers.
“Our job is to make the right decisions for the right reasons, in the interests of the people,” he said on X, formerly known as Twitter.
Mr Albanese is set to break his second election promise, by reducing the stage three tax cuts for higher income workers.
Mr Albanese is expected to announce the reform during his National Press Club speech on Thursday, following an urgent caucus meeting on Wednesday, called to tackle to cost of living.
Labor has now been accused of winning the 2022 election on a “lie” about stage three tax cuts.
The Coalition has suggested it will wind back Labor’s changes if elected to government.
Deputy Liberal Leader Sussan Ley said delivering the tax package as originally legislated was “absolutely” the Coalition’s position.
“The point is, it was Labor’s position too,” she told Sky News.
Labor plans to slash the lowest tax bracket rate from 19 per cent to 16 per cent, and will keep the 37 per cent bracket though have it kick in at $135,000 instead of the current $120,000.
It will also make the 45 per cent tax bracket start from $190,000.
The Coalition’s original stage three plan deleted the 37 per cent bracket and applied a 30 per cent rate to all income between $45,000 and $200,000.
Labor’s changes are “neutral” to the budget as the money saved from slashing higher income cuts essentially equates to the extra cuts delivered to people on $150,000 or below.
Further planned changes include dropping the tax rate for the lowest bracket from the current 19 per cent, to 16 per cent, according to Sky News.
The additional money that will flow through to low and middle income earners has come at the expense of cuts for higher income household
It comes after weeks of, what the Coalition labelled “sneaky” word games from Mr Albanese in which he used the phrase “our position has not changed”, to a series of questions on whether the policy would be changed.
The former Morrison government developed a three stage tax cut plan in 2019, which was legislated by the then-Coalition majority parliament.
After initially opposing the third stage of the tax cuts and seeking to have the Coalition’s bill split to vote on the controversial change separately, Labor ultimately went to the 2022 election supporting the Stage 3 in full.Since taking office in May 2022, Anthony Albanese and his senior ministers have repeatedly stated “our position hasn’t changed” on the cuts.
However backbench Labor MPs have continued to advocate for the package to be altered to help lower income households more, and the Prime Minister has recently pivoted to saying “everyone will be getting a tax cut” rather than committing to the current stage 3 plan in full.
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Originally published as Stage 3 tax cuts winners and losers: What Albanese government changes mean for you
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