The Albanese government

[Sean K]

Lying and shifting goal posts doesn't look good. Especially after last years disaster. Can we trust any of these politicians? The Coalition are developing some ammo for the next election. Maybe Labor think it's far enough away that we'll forget. Is Labor already under the thumb of the Greens?

 

[basilio]

Lying and shifting goal posts doesn't look good. Especially after last years disaster. Can we trust any of these politicians? The Coalition are developing some ammo for the next election. Maybe Labor think it's far enough away that we'll forget. Is Labor already under the thumb of the Greens?

We'll see what the revised tax cuts look like pretty soon. If the Libs want to go to the next election reversing any tax cuts/additional funds for low-middle income and transfer it to those on $150k plus they can argue the case.

On the bigger picture most fair minded analysts thought the structure of the Stage 3 Tax cuts was way out of whack in terms of the impact it was going to have on the budget while being over generous to those already doing quite well.

 

[basilio]

Cabinet approves new tax cuts for workers on less than $150,000 in stage-three revamp​

Taxpayers earning under $150,000 would be better off under a plan to retain the 37% tax bracket, unwinding the Morrison government’s stage-three tax cuts due to come into effect this year

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Paul Karp Chief political correspondent
@Paul_Karp
Wed 24 Jan 2024 08.22 AEDTLast modified on Wed 24 Jan 2024 10.42 AEDT


24
The prime minister, Anthony Albanese, has defended Labor’s plan to make stage-three tax cuts less generous for high-income earners to pay for substantial cost of living relief for others, arguing he must make the “right” decision, not the “easy” one.

All taxpayers earning less than $150,000 will benefit from the Albanese government’s plan to reduce tax cuts for high-income earners, including workers earning less than $45,000 who were slated to miss out on stage-three cuts.

Guardian Australia has confirmed that on Tuesday cabinet approved a plan to retain the 37% tax rate – unwinding the most controversial element of the Morrison government’s stage-three tax cuts passed in mid-2019 with support from Labor.

Savings will be redirected to low- and middle-income earners in a “substantial” cost-of-living relief package, delivering on Albanese’s promise this week that “everyone will get a tax cut” by including those earning between the tax-free threshold of $18,200 and $45,000.

Cabinet approves new tax cuts for workers on less than $150,000 in stage-three revamp

Taxpayers earning under $150,000 would be better off under a plan to retain the 37% tax bracket, unwinding the Morrison government’s stage-three tax cuts due to come into effect this year

www.theguardian.com

 

[PZ99]

I don't think it's possible to have the bottom 50% pay no tax at all.

Last time I checked, everyone pays GST regardless of income and regardless of price inflation

 

[mullokintyre]

We'll see what the revised tax cuts look like pretty soon. If the Libs want to go to the next election reversing any tax cuts/additional funds for low-middle income and transfer it to those on $180k plus they can argue the case.

On the bigger picture most fair minded analysts thought the structure of the Stage 3 Tax cuts was way out of whack in terms of the impact it was going to have on the budget while being over generous to those already doing quite well.

Why would they bother?
All they have to do is say that labour broke its promise.
And it does not change the fact that the bottom 50% who really need the assistance will get bugger all from a tax break as they pay so little tax anyway.
its all about the optics of the politics, nothing to do with equity, justice etc etc etc.
Mick

 

[mullokintyre]

I don't think it's possible to have the bottom 50% pay no tax at all.

Last time I checked, everyone pays GST regardless of income and regardless of price inflation

We are looking at PAYE tax here PZ, thats what the tax cuts are all about.
If you keep raising the tax thresholds, and people keep earning more , it is most certainly mathematically possible to have the bottom 50% pay no income tax at all.
Mick

 

[SirRumpole]

The notional tax rates are one thing, but that doesn't take into account the tax avoidance schemes that higher income earners can use to reduce their tax payable, not to mention that anyone receiving a superannuation pension pays no tax on it no matter how much they get.

 

[Belli]

All I know about anything regarding tax is for this year to date I've paid or have scheduled to pay $21k. Whether that puts me into the "I should complain" or the "Time to line up at the food kitchen" category is up for debate.

Somehow I seem to survive and thrive.

 

[basilio]

Excellent analysis on the ABC about the real increase in cost of living vs the CPI. Certainly highlights the desperation of many people trying to pay a mortgage. Renters of course are also getting it in teh neck.

Why Australian workers' true cost of living has climbed far faster than we've been told​

Why is Prime Minister Anthony Albanese suddenly so keen to deliver extra cost-of-living relief — keen enough to summon Labor members of parliament to Canberra for a briefing on Wednesday, followed by an address to the National Press Club on Thursday?

One immediate reason is that he is keen to make sure Labor wins the upcoming by-election in the outer-Melbourne electorate of Dunkley on March 2.

But the cost of living wouldn't matter much for Dunkley — and it wouldn't matter much for the rest of us — unless it was really biting.

And despite what the treasurer himself has been trying to tell us, it is biting.

Treasurer Jim Chalmers has been pointing out that in the June quarter and the September quarter (the three months to June and to September), real wages grew for the first time in years. By that, he means that the wages index compiled by the Bureau of Statistics began growing faster than the consumer price index.

It's better than growing more slowly, but it tells us next to nothing about what's happening to buying power. Here's why.

Way back in the late 1990s, more than a quarter of a century ago, the consumer price index used to actually reflect the cost of living. It included all of the big costs incurred by households including — importantly — mortgage interest payments, which at the time accounted for an average of $5 of every $100 each wage earner spent.

Then in September 1998, in response to representations from the Reserve Bank and the Treasury, the bureau changed the way it calculated the index, excluding mortgage and other interest payments in a decision it acknowledged would make the index worse at measuring living costs.

It still carries the warning on its website, saying the consumer price index is "not the conceptually ideal measure for assessing the changes in the purchasing power of the disposable incomes of households".

The index actually does a pretty good job of measuring changes in living costs at times when mortgage rates aren't much changing, but at times when they are tumbling it'll overestimate living costs, and at times like the ones we are in when mortgage rates are soaring it will way understate what's happening to living costs.

We know by how much. For years the bureau has also published a separate set of measures it pointedly calls "living cost indexes". These do include mortgage and other interest charges, and for households headed by employers (those for whom the buying power of wages matters) they are substantial.

Living costs are up 9 per cent rather than 5.4 per cent​

The true cost of living has climbed far faster than we've been told. Here's what's actually going on

Now is a particularly good time to announce measures to address the cost of living crisis. We need them because things are a lot worse than the official index suggests, writes Peter Martin.

www.abc.net.au

 

[PZ99]

We are looking at PAYE tax here PZ, thats what the tax cuts are all about.
If you keep raising the tax thresholds, and people keep earning more , it is most certainly mathematically possible to have the bottom 50% pay no income tax at all.
Mick

That doesn't make any difference. Thanks to idiots like Abbott they still pay tax on their super contributions and they still pay consumption taxes.

Stage 1, 2 and 3 tax cuts are all about responding to increased price of goods and services and thus, the increased GST that comes with them.

That's why the adjustments are being made. People on low incomes spend more % of their income on GST than high income earners and inflation makes that problem irreversibly worse.

So yeah, Labor is breaking an election promise which they clearly decided is the lesser of two evils.

I'll personally lose out if these changes go through but so be it if it helps those who are struggling because the Govt was too late with tax cuts.

They could have easily stayed with the Morrison era petrol excise cuts...

 

[sptrawler]

, not to mention that anyone receiving a superannuation pension pays no tax on it no matter how much they get.

One thing you have to add to that in the name of balance is, those receiving a Government pension don't pay any tax on that, or the pension perks either.

 

[basilio]

Why would they bother?
All they have to do is say that labour broke its promise.
And it does not change the fact that the bottom 50% who really need the assistance will get bugger all from a tax break as they pay so little tax anyway.
its all about the optics of the politics, nothing to do with equity, justice etc etc etc.
Mick

The bottom 50% will get support from more direct government grants. Energy rebates, increases in pensions.

The next 30-40% will see some sort of improvement in their tax situation. The top 10-15% will see sizable tax cuts but not to the level the previous Government had intended.

We'll see how the 80% of the population respond to the full picture of what the Government is doing to address Cost of Living issues.
What was the Stage 3 Tax cuts proposing

Who can get the tax cuts?​

Previous years’ tax cuts created a benefit to low-middle income earners whose income is over $37,000. The next set of tax cuts have mostly affected high-income taxpayers earning between $120,001 and $200,000. As the ABC illustrates so well, this is effectively a $189 billion tax cut for people earning more than $120,000, which equals almost 80% of the tax cuts on offer.

Stage 3 Tax Cuts Explained: Who Benefits and How it Affects Your Tax Return

Stage 3 tax cuts come into effect on 1 July 2024 seeing a reduction in the tax rates for taxpayers earning over $45,001.

www.etax.com.au

 

[SirRumpole]

One thing you have to add to that in the name of balance is, those receiving a Government pension don't pay any tax on that, or the pension perks either.

Not necessarily...
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What are government payments, pensions and allowances?​

Australian Government payments, pensions and allowances are income amounts that you receive from a government agency. Commonly these payments are from Services Australia or the Department of Veteran's affairs (DVA).

Depending on the payment type you receive, these payments might be either:

• taxable – meaning you pay tax on the amounts and must declare the income in your tax return
• tax-free – meaning you don't pay tax on the amounts, but you may need to declare them in your tax return so we can work out your eligibility for tax offsets and other benefits.

If you are unsure of the type of payment you receive, contact the government agency to check.

If you lodge your tax return online we pre-fill most of these payments, pensions and allowances in your tax return. You will need to check the pre-fill information and manually include any amounts that have not pre-filled in your tax return.

Taxable pensions, payments and allowances​

You must include taxable Australian Government pensions, payments and allowances in your tax return.

Taxable government payments, pensions and allowances include:

• age pension
• carer payment
• Austudy payment
• JobSeeker payment
• Youth allowance
• Defence Force income support allowance (DFISA) where the pension, payment or allowance that it relates to is taxable
• veteran payment
• invalidity service pension, if you are age-pension age or over
• disability support pension, if you are age-pension age or over
• income support supplement
• parenting payment (partnered)
• disaster recovery allowance (but not in relation to 2019–20 bushfires).

This is not an exhaustive list, for a full list of Australian Government payments, pensions and allowances, see:

• Australian Government allowances and payments
• Australian Government pensions and allowances.

Government payments and allowances | Australian Taxation Office

When to declare taxable and tax-free government payments, pensions and allowances in your tax return.

www.ato.gov.au

 

[basilio]

The ABC did excellent story illustrating the magnitude of the Stage 3 Tax cuts and the effects it would have on other Government spending.

These tax cuts are set to reshape Australia’s budget​

Do you understand their true scale?

This square is the average Australian salary – see how it compares to the size of planned tax cuts

The stage 3 tax cuts are too big to fit on a single screen. We had to get creative to put them into perspective.

www.abc.net.au

 

[basilio]

One thing you have to add to that in the name of balance is, those receiving a Government pension don't pay any tax on that, or the pension perks either.

Not true is it SP. Government pensions do form part of taxable income. It is just the fact that with the Tax free threshold plus the SAPTO offset most pensioners do not end up with a taxable income.

How does SAPTO work? (Senior Australians and Pensioners Tax Offset)

If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.

www.superguide.com.au

 

[basilio]

If we can believe them the Liberals have vowed to go to the next election and unpick proposed tax changes to the Stage 3 cuts.
Yep. Reverse any cuts to Lower and Middle Income tax payers and pour them into the top tier.

Furious Liberals vow to unpick changes to 'promised' stage 3 tax cuts

The Liberal Party responds with outrage to the prime minister's move to change promised tax cuts taking effect in July, saying he won the federal election with a "lie".

www.abc.net.au

 

[sptrawler]

Not true is it SP. Government pensions do form part of taxable income. It is just the fact that with the Tax free threshold plus the SAPTO offset most pensioners do not end up with a taxable income.

How does SAPTO work? (Senior Australians and Pensioners Tax Offset)

If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.

www.superguide.com.au

 

[basilio]

 

[sptrawler]

Not necessarily...
----------------------------------------------------------------------------------------

​

Not true is it SP. Government pensions do form part of taxable income. It is just the fact that with the Tax free threshold plus the SAPTO offset most pensioners do not end up with a taxable income.

How does SAPTO work? (Senior Australians and Pensioners Tax Offset)

If you are eligible for the Age or DVA pension you could be in line for a handy tax rebate, depending on your taxable income and relationship status.

www.superguide.com.au

Only going off my late Mum and Dad and my best mate who retired a year and a half ago, they all said they don't pay tax.
The wife and I saved and are self funded, I draw a pension, hers is still in accumulation phase, so when mine runs out we start on hers.
So we are still paying tax, however when the kids ask if they should put extra into super I give them a definite no, it certainly isn't worth the angst, sacrifice and constant demonising.
My suggestion to my kids enjoy your life, pay off your house and whatever super you have when you retire, hopefully you are still able to enjoy it.
But putting in extra super, is proving to be a mugs game for average middle class Australians IMO.
Unless you are super wealthy, but every self funded retiree is classed as that.
Hopefully they bring in a level playing field and include the PPR in the asset test, that would put the smug ones in a McMansion in the same boat as someone who lives in a small unit in the back blocks, but has $700k in super from the sale of their PPR and doesn't qualify.

 

[InsvestoBoy]

We'll see how the 80% of the population respond to the full picture of what the Government is doing to address Cost of Living issues.
What was the Stage 3 Tax cuts proposing

I'm a high income earner that would benefit from the originally proposed Stage 3 tax cuts.

I'm also a believer that the money could be better spent elsewhere.

However, I do strongly feel that handing increased stage 3 tax cuts to lower tax brackets is going to throw fuel on the inflation fire locally, not help address it.

Tax cuts are a fiscal transfer. Tax cuts to lower tax brackets are a fiscal transfer to the participants of the economy with the highest propensity to spend that money directly into aggregate demand for goods and services.

Demand is demonstrably too high. The money would be better spent identifying the good and services where supply is not meeting demand and increasing the supply of those goods and services.