Care economy workers are the big winners in the tax cuts overhaul, says Treasury
Jim Chalmers reveals the sectors of the workforce that will gain most from income tax cuts.
Treasury analysis shows that workers in the care economy will significantly benefit from Labor’s redesigned stage three income tax cuts, with more than 97 per cent of aged and disabled carers, childcare workers and nurses receiving a bigger tax cut than under the original plan.
While the government’s so-called cost-of-living tax cuts, supported by the opposition, will provide a tax cut for every taxpayer, the data provided exclusively to The Australian shows that more than nine in 10 blue-collar workers, including building labourers, mechanics and police officers, will also receive a larger tax cut.
Treasurer Jim Chalmers said supporting the care economy was a principal aim for Labor’s revised stage three tax cuts and would be “a big winner” with more than 90 per cent of workers in key occupations receiving a bigger tax cut.
“The care economy is a big winner under Labor’s bigger tax cuts for more Australians,” Dr Chalmers told The Australian. “Our tax cuts are good for carers and great for the economy.
“Helping frontline workers with the cost of living is our focus, but just as importantly, our bigger tax cuts for more Australians will reward aspiration and incentivise people to work more and earn more in industries where we desperately need more workers – and that’s deliberate.”
The service industry will also benefit from the revamped tax cuts, with Treasury analysis finding that 91 per cent of restaurant and cafe waiters, 96 per cent of retail store managers and 96 per cent of storepersons are also set to receive a bigger tax cut than the original legislated plan.
Treasury also provided analysis to the government that the changes to the stage three income tax cuts will increase the supply of labour by around 930,000 hours per week.
“That’s the equivalent of 25,000 full-time jobs, and it’s more than double the labour supply impact of the old stage three,” Dr Chalmers said.
“We’ve designed this policy to ensure that this boost to labour supply will make the most meaningful difference in industries that need more skilled workers, such as the care economy.”
Overall, the Treasurer reiterated that 84 per cent of taxpayers will receive a larger tax cut than that which was legislated, then supported by Labor during the previous Coalition government.
From July 1, the 19 per cent income tax rate would reduce to 16 per cent for incomes between $18,200 and $45,000, the 32.5 per cent tax rate reduces to 30 per cent for incomes between $45,000 and $135,000, the 37 per cent tax rate would apply from the increased threshold of $135,000 and the 45 per cent tax rate applies to incomes above $190,000.
“This policy is proof that we don’t need to choose between relief or reform,” Dr Chalmers said.
“We’re delivering vital cost-of-living relief at the same time as we deliver vital economic reform – and nowhere is that clearer than in the care economy.”
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