Stage 3 tax cuts pass SenateBY JAMIE WILLIAMSON | WEDNESDAY, 28 FEB 2024 3:09PMThe government's amendments to the stage 3 tax cuts have been passed and will automatically take effect on July 1. The Albanese government said the amendments were made due to the cost of living crisis. Now, everyone will benefit from a tax cut, it said. However, those earning over $180,000 will see their promised tax cut reduce while lower-income earners are to receive more relief than initially promised. Among the changes, Treasury will reduce the 19% tax rate to 16% and increase the threshold for the 37% tax rate from $120,000 to $135,000 (see Figure 1 and 2).
Source: H&R Block A person on an average income of $73,000 will receive a tax cut of about $1504, the government said. Previously, they would have saved around $700. "The changes to the personal income tax system will have a net cost of $1.3 billion over the forward estimates. The total impact of these tax cuts is expected to be $107 billion over the forward estimates," the government said. The Morrison government legislated the tax cuts in 2018 when it was in power at the time. It originally proposed tax reductions for those earning $45,000 and over to take effect on 1 July 2024. It would remove the 37% tax bracket and the 32.5% marginal tax rate be reduced to 30%. This delivered the greatest benefit to those earning $200,000 or more. Related News |
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