Regional Victorians to receive well below national average in tax cut plan, says Australian Institute

FAMILIES in some regional Victorian centres will receive well below the average benefits that will flow to everyday Australian households from the government’s proposed income tax cuts, new analysis has revealed.

REGIONAL Victorians will receive well below the average benefits that will flow to everyday Australian households from the government’s proposed income tax cuts, new analysis has revealed.

Inner-city Melbourne electorates Melbourne Ports, Higgins, Kooyong and Goldstein will receive at least 1½ times the national average, while families in some regional centres will get just 86c for each dollar received by the average household.

But Treasurer Scott Morrison has dismissed the “Leftist think tank” study as an argument to tax Victorians more so “Labor can spend more of the state’s money”.

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The analysis, commissioned by The Australia Institute, took into account tax cuts and measures announced in the Budget and averaged out the benefit in dollar terms to each federal electorate.

The Turnbull Government’s three-phase tax plan would give low and middle-income earners relief from next year and address bracket creep over seven years. In the third stage, the government is proposing the removal of the 37 per cent marginal tax rate, so from July 2024, all income from $41,001 to $200,000 will be taxed at a marginal rate of 32.5 per cent.

Treasurer Scott Morrison has dismissed the ‘Leftist think tank’ study as an argument to tax Victorians more so “Labor can spend more of the state’s money”. Picture: AAP

The Turnbull Government’s three-phase tax plan would give low and middle-income earners relief from next year and address bracket creep over seven years. Picture: Kym Smith

“While the biggest winners are all wealthy inner-city electorates, the losers are spread across electorates like Gippsland, Mallee and Ballarat,” said Matt Grudnoff, senior economist at The Australia Institute. “This tax cut is highly selective. And it’s no surprise the inner-city, predominantly Liberal seats get the most out of it. This is a tax cut that truly delivers for the top end and leaves everyone else behind.”

He said by political party, it was clear that in Victoria, the least benefit flowed to National Party and Labor seats.

On a national scale, one-quarter of Nationals’ seats are in the bottom 10 electorates, with all but one of the party’s seats ranked in the bottom half of electorates.

The lobby group argues the top-end tax cuts in stage two and three are “unfair” and “fiscally irresponsible” and should be blocked by the Senate.

A spokesman for the Treasurer said: “It’s no surprise that the higher tax club are out throwing shoes at our personal tax policy.

“We think that Australians should be able to keep more of what they’ve earned.”

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