Revealed: The REAL Federal Budget Winners – And They’re Not Everyday Aussies
- The government will announce the budget on Tuesday
- Wealthy Aussies will benefit the most from tax cuts
- This despite measures for the cost of living in the budget
While the Albanian government’s federal budget prioritizes relief for low-income earners, the wealthy will benefit most from tax cuts.
Treasurer Jim Chalmers, who has extensively broken down support for Aussies during the cost-of-living crisis, will present the budget in parliament on Tuesday.
At the heart of the government’s plans is more than $14.6 billion in cost-of-living relief for Australians over four years.
This includes an electricity lighting handout that will save households up to $500 in utility bill costs. This handout will be for the benefit of elderly retirees and benefit recipients.
But the phase three tax cuts, which will take effect next year, mean high-income earners will see the biggest savings in years to come.
Treasurer Jim Chalmers (pictured), who will hand over the budget on Tuesday, has remained adamant that the government will make no changes to the phase three tax cuts
Stage three removes the 37 percent marginal tax bracket and lowers the tax rate from 32.5 percent to 30 percent for all individuals earning between $45,000 and $200,000.
A new 45 percent marginal tax rate would apply to those earning more than $200,000.
This means those who earn more than $200,000 and file their tax returns for fiscal year 2024-25 will get back $9,075 compared to 2023-24.
Someone earning $80,000, a tier below the average full-time salary of $92,030 in Australia, will get back just $875.
The cuts are estimated to cost the budget about $20 billion a year from mid-2024, according to the Gratton report. This will rise to $31 billion by 2030.
Over a ten-year period, phase three cuts will cost the country about $254 billion.
This means wealthy Australians will receive the most aid over the next four years thanks to the cuts – even if the government’s cost of living is central to the budget.
The previous coalition government, backed by Labor in the opposition, introduced sweeping phase three tax changes in an election year in 2019 shortly before the pandemic. A new 30 percent rate would apply to those earning $45,000 to $200,000 (stock image)
The stage three cuts were introduced in 2019 by the former Morison administration in an effort to boost the economy and clear the backlog.
It was passed with the support of Labour, despite the party initially having reservations about the cuts.
Anthony Albanese vowed ahead of last year’s federal election not to make any changes to the cuts if elected.
Treasurer Jim Chalmers has remained adamant that the government still had no intention of amending the legislation.
“The tax cuts are in the budget because our position hasn’t changed and they were legislated some time ago,” he told the ABC on Sunday.
He also said earlier this month: “Our stance on Phase 3 tax cuts has not changed and it’s important to remember that they haven’t come in for over a year now.”
Our focus in this budget is to weather all the pressures in our economy in a methodical and responsible manner. That means a decent cost of living package aimed at the most vulnerable, delivered in the most responsible way.”
The phase three tax cuts will take effect in July 2024.