Prime Minister Anthony Albanese promises tax cuts from July

Prime Minister Anthony Albanese has announced a huge tax change to be implemented from July after weeks of speculation.

Anthony Albanese has pledged that promised tax cuts “will happen” from July after weeks of speculation ensuring that those earning over $200,000 score a whopping $9000 a year tax cut.

But there’s a big gap between what some workers get and others with those earning $45,000 scoring just 43 cents-a-week in tax relief.

For high income earners on $200,000 a year, his tax cuts are worth $9000 annually or $756-a-month from July 1, 2024.

A worker on $200,000 a year currently pays $60,667 in tax but will only pay $51,592 after the changes.

By comparison, if you currently earn $50,000 you are paying $6717 in tax and $6592 after the changes, delivering a tax cut of just $125 a year.

That’s a tax cut of 34 cents a day or $2.40 a week.

Prime Minister Anthony Albanese finally pledged the tax cuts “will happen” on Adelaide radio on Wednesday.

“We have no change to our plans. We, of course, have said that tax relief is really important,’’ Mr Albanese said.

“I mean, that’s one way that you put more money into people’s pockets. And tax cuts are important.”

“So they’re going to happen?,’’ he was asked on Triple M Radio Adelaide.

“Well, tax cuts will happen in July,’’ he said.

“We’re committed to that. Well, we haven’t changed our position on that.”

Speaking on FIVEaa radio, he stressed the tax cuts will kick in for anyone earning over $45,000.

“At the moment, these cuts cut in at $45,000. That’s not a wealthy position, far from it, of course,’’ he said.

Prime Minister Anthony Albanese has pledged the tax cuts “will happen” this year. Picture: NCA NewsWire / Morgan Sette

“And we think that given cost of living pressures, the beginning of the next financial year is the right time to bring in income tax relief. And that is what we will be doing.

“We’ve had a range of targeted measures to take pressure off cost of living, cheaper child care, the Fee Free TAFE is one of them, as well as cheaper medicines and our energy price relief plan that have all made a difference.

“Inflation is heading in the right direction.”

It has been publicly disclosed that these tax cuts are estimated to cost around $69 billion over the forward estimates period (to 2026-27).

The Parliamentary Budget Office published updated costs in May 2023, estimating the tax cuts to cost around $69 billion over the forward estimates period (to 2026-27), and around $313 billion over the medium-term projection period.

The Prime Minister has said that inflation is “heading in the right direction”. Picture: NCA NewsWire / Gaye Gerard

However, the changes remain controversial, with Greg Jericho, chief economist at the progressive think tank The Australia Institute, insisting the stage three tax cuts are “terrible”.

“In the first year alone, the cuts are estimated to cost $21 billion in foregone revenue. This is $1 billion less than the entire budget surplus for 2022–23, equal to the annual budgeted expenditure for financial support for People with Disability in 2024–25, and some $6 billion more than the amount budgeted for Job Seeker Income Support,’’ he said.

Lyn Morgain, chief executive of the charity Oxfam Australia, said the government “absolutely must abolish stage three”.

“It is absolute lunacy that at a time when Australia cannot adequately house its own people or contribute our share to the global crisis, we are giving away money to the top end of town,” Ms Morgain told ABC Radio.