INCOME TAX – AUSTRALIA

Dutton sets scene for election tax battle

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 7-Feb-24

The Coalition agreed to support changes to the legislated stage-three income tax cuts at a partyroom meeting on Tuesday. Opposition Leader Peter Dutton says the Coalition will back the tax cuts for people on low incomes, in order to support families amid the cost-of-living crisis. However, Dutton has indicated that the Coalition will take a "significant" tax policy to the next election; he says the Coalition will reduce taxes for Australian families, as they will need a lot of support to recover from Labor’s current term in office. Shadow treasurer Angus Taylor says ‘bracket creep’ is among the tax issues that the Coalition will aim to address.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Exit stage three: Libs in tax pivot

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Original article by Geoff Chambers, Joe Kelly, Patrick Commins
The Australian – Page: 1 & 4 : 6-Feb-24

The Coalition will finalise its position on the proposed changes to the stage-three tax income cuts at a joint partyroom meeting on Tuesday. Sources have indicated that the Liberal and National parties are unlikely to oppose the federal government’s changes, although they are expected to seek some amendments to Labor’s legislation. Opposition leader Peter Dutton will also use parliament’s first question time of the year to attack the government and Prime Minister Anthony Albanese for reneging on an election commitment to implement the stage-three tax cuts in full. He will also contend that the government plans to target the negative gearing regime, trusts and the family home.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Coalition voters win in Labor’s tax U-turn: PM

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 7 : 31-Jan-24

Treasury analysis shows that the federal government’s proposed changes to the stage-three income tax cuts package will strongly benefit Coalition voters. The analysis suggest that about 85 per cent of voters in seats held by the Liberal or National parties will be better off than they would have been if the tax cuts had gone ahead in their original form. The federal government will use the Treasury data to seek the Coalition’s support for its changes. The Opposition will not decide its formal stance on the changes until parliament resumes next week; however, it will continue to reiterate that Labor has broken an election promise regarding the tax cuts.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIAN LABOR PARTY

Coalition splits over ALP tax cuts overhaul

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Original article by Rosie Lewis, Jess Malcolm, Sarah Ison
The Australian – Page: 1 & 4 : 30-Jan-24

Shadow cabinet ministers will meet on Tuesday to discuss the federal government’s proposed changes to the legislated stage-three tax cuts. Senior sources within the Liberal Party have suggested that the Coalition will seek amendments to Labor’s legislation but is unlikely to vote against it. Judo Bank’s chief economic adviser Warren Hogan said it would be hard for the Coalition to oppose Labor’s tax changes, although he says it could pursue the ‘reform element’ of the original income tax cuts package ahead of the next election.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, JUDO BANK PTY LTD

Labor to break tax cut promise

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Original article by Phillip Coorey, Tom McIlroy
The Australian Financial Review – Page: 1 & 4 : 24-Jan-24

The federal government is set to break a key election pledge by making changes to the legislated stage-three personal income tax cuts. The proposed changes were discussed at a cabinet meeting on Tuesday, and will be endorsed by Labor’s caucus on Wednesday. Amongst other things, the government is expected to retain the 37 per cent income tax rate that was to have been abolished in July, although the current income threshold of between $120,000 and $180,000 will be increased. Prime Minister Anthony Albanese is slated to announce the changes to the tax cuts package and new cost-of-living relief measures at a National Press Club speech on Thursday.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Greens warn Labor stage-three tax cuts will add to inflation and bring little relief for most workers

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Original article by Paul Karp
The Guardian Australia – Page: Online : 23-Jan-24

Prime Minister Anthony Albanese has given strong indications that further cost-of-living relief will be on the federal government’s agenda at a caucus meeting on Wednesday. However, the government has downplayed reports that it will make changes to the legislated stage-three personal income tax cuts, including retaining the existing top marginal tax rate and increasing the tax-free threshold. Meanwhile, the Greens have written to Treasury Jim Chalmers arguing amongst other things that the tax cuts package is unsustainable, primarily benefits wealthy people and will be inflationary.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN GREENS, AUSTRALIA. DEPT OF THE TREASURY

Albanese insists ALP will honour its stage three tax cut promise

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Original article by Tom McIlroy
The Australian Financial Review – Page: 4 : 30-Nov-23

Prime Minister Anthony Albanese has reiterated in parliament that Labor remains committed to implementing the Coalition’s legislated stage-three personal income tax cuts, which are slated to take effect in mid-2024. Labor had committed to proceeding with the tax cuts during the 2022 federal election campaign. Albanese has also told Labor’s final caucus meeting for the year that keeping election promises is critical to maintaining trust with voters, with the nation due to go the polls again in 2025.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY

Surplus bounty pushes tax take past 24pc

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Original article by Andrew Tillett
The Australian Financial Review – Page: 3 : 3-Jul-23

Record revenue from company and personal income taxes has resulted in the federal budget being in surplus by $19bn for the first 11 months of 2022-23, putting it on track for a surplus of around $20bn for the financial year. This compares with Treasury’s forecast of a $4.2bn surplus when the budget was released in early May. Economist Chris Richardson estimates that the tax-to-GDP ratio is currently around 24.2 per cent; it has breached the 24 per cent level for the first time since 2007-08, and Richardson believes that this could become a permanent trend. Treasurer Jim Chalmers has previously stated that he does not feel bound by the former Coalition government’s cap of 23.9 per cent, describing it as "arbitrary".

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Stage-three tax cuts cost blowout predicted with the wealthy and men to benefit most

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Original article by Paul Karp
The Guardian Australia – Page: Online : 17-May-23

The Parliamentary Budget Office’s latest analysis of the legislated stage-three personal income cuts is that the package will cost $313bn over a decade. This compares with a previous estimated of $254bn, released in October 2022. The PBO’s analysis was undertaken on behalf of the Greens, and concludes that men will receive 65 per cent of the tax cuts over 10 years, or $203.7bn of the total. People in the highest income brackets are also set to gain the most benefit from the tax package. Greens leader Adam Bandt describes the stage-three tax cuts as a "massive black hole", and argues that the money should be spent on services for all Australians rather than benefiting the wealthy.

CORPORATES
AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIAN GREENS

Melbourne Institute & Roy Morgan – Taking The Pulse of the Nation: Tax rebates boosted consumption for Australians

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Original article by Roy Morgan
Market Research Update – Page: Online : 29-Nov-22

In 2022, tax refunds for Australians with taxable income below $126,000 were expected to be between $675 and $1,500 – a $420 increase from previous years. The Taking the Pulse of the Nation Survey recently asked Australians how they would spend their expected tax refunds. The survey results indicated that about $515 (48%) of the refund was spent on consumption, $318 (27%) on savings and investment, and $246 (22%) on paying existing debts. The response to tax refunds varied with income: those with annual taxable income below $32,000 consumed 50 percent more of their refunds than those with annual taxable income above $100,000. Of interest is whether tax filers’ anticipated consumption coincided with their actual behaviour after the tax refund was received. There is remarkable consistency in what tax filers say they would do with the refund and what they did with it. Policy makers and business might be able to anticipate policy effects by gathering richer data from consumers. This report is based on a total of 2,000 respondents from data collected in May and October 2022. Visit the Melbourne Institute Taking the Pulse of the Nation web portal for further information and to access interactive charts and other findings: https://melbourneinstitute.unimelb.edu.au/data/ttpn.

CORPORATES
ROY MORGAN LIMITED, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH