Albanese links his fate to Chalmers’ with Stage 3 tax cut about-face | Samantha Maiden
The PM has bet most voters aren’t going to care about the “brutal” effect breaking his promise will have on those who would gain most from it, writes Samantha Maiden.
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It’s cynical, duplicitous, craven and suggests you can never trust another political promise Anthony Albanese makes – and it just might work.
That’s my initial take on the Prime Minister for “the government’s position hasn’t changed” changing the government’s position on the Stage 3 tax cuts.
The reason why it just might work is that it shoves an extra $804 into the pockets of most Australian workers.
When you combine that with what they already got under the legislated proposal that’s worth an extra $2000 a year for workers earning $100,000.
Many economists will welcome the changes because they ensure that the lion’s share of tax cuts no longer go to the people that need the money the least.
Of course it also means we will deny relief to the people who pay the most tax.
Anthony Albanese plans to rob the rich to upsize tax cuts for middle income earners under planned changes that will deliver a worker on $100,000 an extra $2179 a year.
But the biggest losers are workers earning $200,000 or more who will see a planned $9075 annual tax cut slashed in half to just $4546.
A new analysis of the planned tax cuts prepared by the ANU’s Ben Phillips suggests that workers earning between $45,000 and $135,000 will secure an extra $804 a year under Prime Minister Anthony Albanese’s proposed changes.
But you have to wonder why the Prime Minister pledged not to change the Stage 3 tax cuts, a never, ever promise that he walked away from without even blinking.
Indeed he was telling Adelaide radio the tax cuts as legislated “will happen ‘’ last week.
Now they won’t and the Prime Minister doesn’t appear to be even slightly perturbed about the weasel words.
The Robin Hood tax strategy is emerging as Labor MPs gather in Canberra to learn of the changes which are believed to include reducing the lowest tax bracket of 19 cents in the dollar to 16 cents.
Based on the parameters we currently know the Australian National University crunched the numbers on the changes and the results suggest that even workers earning $135,000 will secure an extra $400 a year under the changes.
But if you earn $150,000 you go backwards compared to what you were promised at the election and are worse off by $250 a year.
If you earn $180,000 your promised tax cut will be slashed by $2346 a year and if you earn $200,000 you will be worse off by $4546.
ANU Associate Professor Ben Phillips said the tax changes made sense but were “brutal” for higher income earners.
“It’s a big tax increase relative to the original plan. But if I was redesigning Stage 3 it’s ended up where it should – returning bracket creep to most workers.
“The main problem was doing too much for high income earners and nothing for low income earners.
“That seems now to be addressed.”
By lowering the 19 cent tax rate for earnings between will deliver a tax cut to “everyone” for earnings between $19,000 and $45,000.
The Prime Minister also proposes to reduce the 32.5 per cent tax bracket to 30 cents in the dollar for earnings between $45,000 and $135,000,
But the big change that will hit higher income earners is the PM and his Treasurer Jim Chalmers will no longer abolish the 37 per cent tax rate.
Under the legislated tax changes that was going to deliver a flat 30 per cent tax rate for all earnings between $45,000 and $200,000.
Instead, the 37 per cent tax rate will still apply for earnings between $135,000 and $190,000.
Deputy Opposition Leader Sussan Ley pledged the Coalition will roll back any changes made by Anthony Albanese on the stage three tax cuts if they win the next election.
“All of this has been decided without proper consultation with the Australian people,’’ she said.
“The election was won on a lie.”
SA premier Peter Malinauskas’ backed giving low and middle income earners more during an interview on the Today show but said he was concerned about taking money off the rich if it was an election promise.
“Let’s wait and see what the Prime Minister announces. But Middle Australia has been wearing too much and shouldering too much of the burden,’’ he said.
“Um, do you think broken promises are all right?,’’ Karl Stefanovic asked.
“I think they’re better avoided,’’ the SA Premier replied.
“Enough said, Premier,’’ the Nine host replied.
It’s a gamble that ties the political fortunes of the Prime Minister to his Treasurer – with both men set to cop the heat for the backflip.
The Prime Minister’s office has repeatedly insisted there were “no plans” to alter the tax cuts – a claim now proven to be false as those plans were being furiously worked on in Anthony Albanese’s office.
Originally published as Albanese links his fate to Chalmers’ with Stage 3 tax cut about-face | Samantha Maiden
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