INCOME TAX – AUSTRALIA

Workers pay as income taxes hit a 30-year high

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Original article by Michael Read
The Australian Financial Review – Page: B5 : 13-May-26

The federal government’s budget includes a new and permanent income tax break for wage and salary earners. The Working Australians Tax Offset will be worth up to $250 per annum and is slated to cost about $3bn in its first full year of operation; an estimated 13.3 million workers will be entitled to the tax offset, although it will not be available until they submit tax returns for the 2027-28 financial year. Meanwhile, the budget papers show that government revenue from individuals’ income tax is forecast to exceed $382bn in 2027-28; this equates to 52 per cent of the total tax take, and it is expected to rise to 54.5 per cent by 2029-30.

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Tax take hits record $30,633 per person

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The Australian Financial Review – Page: 4 : 22-Apr-26

Data from the Australian Bureau of Statistics shows that the combined tax revenue of the federal and state governments rose to a record $839bn in 2024-25. This was boosted by higher revenue from the goods and services tax and personal income tax. The latter increased by 1.5 per cent and accounted for 11.1 per cent of GDP; the Parliamentary Budget Office has estimated that this will increase to 14.5 per cent in 2036, due to the impact of ‘bracket creep’. The ABS figures also show that the cost of disability benefits – including the NDIS – increased by 9.4 per cent in 2024-25 to a record high of $87.3bn.

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AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Fix cruel taxes for younger workers: Kelty

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Original article by John Kehoe
The Australian Financial Review – Page: 4 : 7-Jan-26

Former ACTU secretary Bill Kelty has urged the federal government to pursue tax reform, contending that the current tax system disadvantages younger workers in particular. Amongst other things, Kelty has advocated reducing the tax rates of wage earners who do not receive income from capital gains, trusts and negatively-geared properties. The Parliamentary Budget Office has forecast that the average tax rate for workers will rise to 27.8 per cent of their income over the next decade; this compares with about 24.5 per cent at present. Kelty notes that in contrast, investors who receive income from property and shares incur a maximum capital gains tax rate of just 23.5 per cent for assets that they have held for more than 12 months.

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ACTU, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Dutton’s tax oath

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Original article by Paul McIntyre, Dennis Shanahan
The Australian – Page: 1 & 4 : 17-Apr-25

Opposition leader Peter Dutton has indicated that income tax reform will be one of his long-term goals if the Coalition wins the election on 3 May. He has identified tax indexation as an issue that he particularly wants to address, arguing that ‘bracket creep’ stifles productivity, ­entrepreneurialism and hard work. However, Dutton has emphasised that returning the budget to surplus would be the priority in the first term of a Coalition government, given that Labor has forecast deficits for the next decade. Dutton likens his approach to that of John Howard and Peter Costello in the 1990s, whereby they focused on budget repair during their first term in office before putting tax reform on their second-term agenda.

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LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

$17b tax cut sparks poll fight

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Original article by Phillip Coorey
The Australian Financial Review – Page: Online : 26-Mar-25

Shadow treasurer Angus Taylor has accused the federal election of an election bribe after it used the 2025 budget to announce a tax cut. The cut will see the 16 per cent tax rate, which applies to workers earning between $18,201 and $45,000, reduced to 15 per cent from 1 July 2026, with the rate then being cut to 14 per cent from 1 July 2027; all up, the cuts will save workers in that earning bracket $536 a year and will be worth $17.1 billion over five years. Taylor said the Opposition would not support the proposed tax cuts, while the budget forecasts a deficit of $27.6 billion for this financial year, increasing to $42 billion in 2025-26.

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Households deplete pandemic savings

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Original article by Michael Read
The Australian Financial Review – Page: 3 : 28-Aug-24

The Reserve Bank of Australia has estimated that the nation’s households had amassed excess savings of about $300bn during the COVID-19 pandemic. However, National Australia Bank believes that this figure was about $200bn. Meanwhile, research from Yarra Capital Management suggests that households had most likely exhausted these pandemic-era savings by March 2024. Economists are now speculating as to whether consumers will opt to spend or save the additional income from the stage-three tax cuts that took effect on 1 July. Too much spending could force the RBA to leave the cash rate on hold for longer than expected.

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RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, YARRA CAPITAL MANAGEMENT

Australians flattened by biggest tax increase in world

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Original article by Shane Wright
The Sydney Morning Herald – Page: Online : 26-Apr-24

Data from the OECD shows that the amount of income tax paid by the average wage-earner in Australia rose by 7.6 per cent in 2023. New Zealand ranked second among developed nations with an average tax increase of 4.5 per cent. The OECD says the decision to phase out the low- and middle-income tax offset contributed to the sharp rise in Australians’ personal income tax bills in 2023-24. The temporary measure was part of the former Coalition government’s stage-three tax cuts package.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

CBA chief in call for radical tax overhaul

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Original article by Paulina Duran
The Australian – Page: 19 : 27-Mar-24

Commonwealth Bank of Australia CEO Matt Comyn has called for a major revamp of the nation’s tax system as part of the federal government’s economic growth strategy. Amongst other things, Comyn has proposed the abolition of inefficient taxes such as stamp duties and payroll tax. He has also advocated streamlining the personal income tax regime and the existing tax brackets, including lifting the tax-free threshold to $20,000. Comyn adds that the GST could be increased from 10 per cent to 15 per cent to offset the loss of personal income tax revenue, while he has proposed banning cash payments of more than $500 in order to combat the black economy.

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COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

‘Every taxpayer wins’: PM hails stage three victory

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Original article by Patrick Commins
The Australian – Page: 1 & 4 : 28-Feb-24

The federal government’s changes to the legislated stage-three personal income tax were passed by the Senate with bipartisan support on Tuesday night. Prime Minister Anthony Albanese contends that 84 per cent of Australians will get a bigger tax cut than they would have via the original version of the former Coalition government’s tax package. The government can be expected to capitalise on the stage-three changes in the final days of campaigning for the Dunkley by-election; Albanese says the changes are a win for "every single taxpayer" in the Melbourne electorate.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Frontline workers lose under Labor’s tax cuts

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Original article by Patrick Commins, Geoff Chambers, Geoff Chambers
The Australian – Page: 1 & 4 : 14-Feb-24

Analysis suggests that essential workers will benefit in the short-term from the federal government’s changes to the legislated stage-three tax cuts. However, so-called ‘bracket creep’ means that many middle-income earners will be paying more tax in 10 years’ time. They include school principals, police officers, electricians and paramedics. Meanwhile, a report from S&P Global has concluded that the government’s changes could be "marginally" more inflationary than the original version of the package, given that they will return more money to low- and middle-income earners.

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S&P GLOBAL INCORPORATED