- Joined
- 8 June 2008
- Posts
- 12,782
- Reactions
- 18,692
Amazing :Tax is certainly on the Government agenda, which is great IMO.
Australians are claiming billions of dollars worth of tax deductions for work-related expenses and managing their tax affairs as the concessions built into the tax system weigh on the amount of revenue flowing into federal coffers.
Australians recouped a record $9.9 billion in work deductions
The Albanese government has started a debate about tax concessions around superannuation. But there are more than 300 in our tax system.www.smh.com.au
A breakdown of the latest tax expenditure report, used this week to justify the federal government’s planned changes to the tax on superannuation balances of more than $3 million, also show forgone revenue on everything from childcare to business research and development is growing faster than parts of the super system.
Outside superannuation and capital gains, the largest cost to the budget is work-related tax deductions, which are expected this year to reach a record $9.9 billion, a jump of almost 24 per cent since 2018-19. Next financial year, they are tipped to increase to $10.4 billion.
The tax concession report, first introduced by Paul Keating in 1986, attempts to track cost of forgone revenue caused by different tax rates or concessions across the entire tax system.
Last Tuesday’s report identified capital gains tax concessions and discounts on the family home, other assets and through trusts as the single largest tax expenditure in Australia at almost $72 billion, obliging Prime Minister Anthony Albanese to definitively rule out taxing the family home as “a bad idea”.
The surge in house values and share prices over the past four years have driven up the value of the concessional tax treatment of capital gains, but higher interest rates and a slowing economy are expected to reduce these concessions over the next three years.
The second largest are the concessions on employer superannuation contributions and the lower tax rate on super earnings, which amounted to $50 billion.
While capital gains and superannuation are the two largest concessions, there are now more than 300 of which some are almost impossible to measure because they are so small they are difficult to estimate.
In 2019-20, 86 per cent of the total tax reduction via work-related deductions went to people with an above median taxable income, with more than one-quarter going to people in the top 10 per cent of income earners.
Men, who accounted for 65 per cent of reductions, received on average a $1050 reduction. About 4.7 million women received an average tax reduction of $600.
For the first time, the report notes about 6.6 million people claimed $4 billion for the cost of managing their tax affairs in 2019-20. This reduced total tax payments by $1.4 billion.
This year, the forgone tax is estimated to cost the budget $1.6 billion. Labor went to the 2019 federal election with a now-abandoned proposal to cap the amount a person could claim for managing their tax affairs to $3000.
The fastest growing expense is the exemption for NDIS recipients from forms of income tax. After growing by almost 59 per cent since 2018-19 to $8.1 billion, this is tipped to climb another 19.2 per cent to $12 billion by 2025-26.
Over the next four years, four of the five fastest growing tax expenditures are expected to be sectors that are exempt or zero-rated for the GST – childcare services, residential care, financial supplies and health services.
The exemptions, put in place as part of the original deal struck by John Howard with the Australian Democrats in 1999 to get Senate approval for the GST, are expected to be worth $31 billion this year.
Government debt reached $901.3 billion on Friday, the record under the Albanese government, but was exceeded under the Morrison government in early 2022. The Albanese government in October forecast debt to reach a record $1 trillion by mid-2024.
Chalmers said it was important to recognise that the “right path is not always the path of least political resistance”.
work related tax deduction increased by 24% since 2018..you mean 24% in 4 years with ramping inflation since 2018 plus the fact that many people are now working from their homes rather than the company office..?
Any real journo would notice and say ONLY 24%?
Stop wasting and spending money instead of endless sucking dry the nation..and all the pension and benefit people, the ALP to join the chorus and shout "bloody bastards".
This nation is sick, and not sure it can heal with that state of mind
