INCOME TAX – AUSTRALIA

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.

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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.

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

Don’t break tax promise: Labor MPs

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Original article by Greg Brown
The Australian – Page: 1 & 2 : 5-Oct-22

Labor MPs Helen Polley, Mike Freelander and Meryl Swanson have stated that the federal government must not back down on its election commitment to proceed with the Coalition’s stage-three personal income cuts. Freelander says he is "uncomfortable" about the tax cuts – which will benefit high-income earners in particular – but he contends that governments must keep their promises. Treasurer Jim Chalmers has again refused to rule out making changes to the tax package, while Assistant Treasurer Andrew Leigh has also emphasised the need to abide by election commitments. Meanwhile, Chalmers has doubled down on his warning about the outlook for the global economy and the prospect of a further rise in Australia’s inflation rate.

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AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Labor canvasses capping stage three tax cuts

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 4 : 4-Oct-22

The federal government has ruled out scrapping the stage-three income tax cuts that are slated to take effect in mid-2024, although it may be open to scaling them back. The Greens and the majority of independents in the Senate favour winding back the tax cuts, which will primarily benefit people on higher incomes. Labor could potentially announce any change in its stance on the legislated tax cuts in the Budget on 25 October. The British government has reversed its decision to abolish the nation’s top tax rate, and the Greens have urged Labor to follow its example.

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AUSTRALIAN LABOR PARTY, AUSTRALIAN GREENS

Tax cuts to soon disappear as budget relies on workers to recover from COVID-19

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Original article by Shane Wright
The Age – Page: Online : 22-Sep-21

Analysis by the Parliamentary Budget Office shows that ‘bracket creep’ will erode the benefits of the federal government’s personal income tax cuts over the next decade. The PBO has forecast that people with annual income of $20,000 to $50,000 face an increase of 6.6 per cent in their average tax rate by 2031-32, while those earning between $50,000 and $75,000 will pay an extra three per cent. People earning $96,000 to $160,000 a year are the only ones who will be paying a lower average tax rate. The final stage of the income tax cuts package will take effect in mid-2024.

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AUSTRALIA. PARLIAMENTARY BUDGET OFFICE

Don’t trust Labor to cut high-income tax: Treasurer

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Original article by Phillip Coorey
The Australian Financial Review – Page: 9 : 14-Jul-21

Labor leader Anthony Albanese says the party will decide its stance on the stage-three income tax cuts at "an appropriate time". He adds that the COVID-19 pandemic is Labor’s top priority at present. Labor is expected to formally commit to retaining the legislated tax cuts if it wins the next federal election, after the issue was discussed by the party’s leadership group in recent days. However, Treasurer Josh Frydenberg says Labor has consistently opposed the Coalition’s tax policy and it cannot be trusted to honour any commitment regarding the stage-three tax cuts.

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AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY

Taxes down, super up from today

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Original article by Michael Read
The Australian Financial Review – Page: 13 : 1-Jul-21

The corporate tax rate for small and medium enterprises with turnover of less than $50m will be reduced by one per cent to 25 per cent on 1 July. Other changes that take effect at the start of the new financial year include an extension of the low- and middle-income tax offset and an increase in the superannuation guarantee from 9.5 per cent to 10 per cent. The Association of Superannuation Funds of Australia estimates that the super change will boost the retirement income of the average worker by about $19,000. New measures aimed at first-home buyers also take effect on 1 July.

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THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED

Lower corporate taxes vital to growth

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Original article by Tom Dusevic
The Australian – Page: 2 : 30-Jun-21

The Business Council of Australia has released a discussion paper which calls for an overhaul of the nation’s tax system. The BCA contends that tax revenue is too heavily skewed toward the largest companies and the three per cent of individuals who pay the highest personal income tax, and the tax system must evolve in line with a changing economy. BCA CEO Jennifer Westacott says the 30 per cent company tax rate in particular needs to be reviewed, given that the OECD and the Group of Seven have proposed a global minimum corporate tax rate of just 15 per cent.

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BUSINESS COUNCIL OF AUSTRALIA, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, GROUP OF SEVEN (G-7)

ALP warms to $130bn tax cuts

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Original article by Geoff Chambers, Greg Brown, Patrick Commins
The Australian – Page: 1 & 4 : 27-May-21

Labor is finalising the tax policy that it will take to the next election, and there are indications that it may support the federal government’s stage-three tax cuts. Labor’s caucus is divided over the issue of the tax cuts, which will benefit high-income earners in particular; however, there is growing support for the tax cuts among senior Labor MPs, who are concerned about a potential voter backlash at the next election over any changes to a tax package that has already been legislated. Labor is not expected to retain the government’s Low and Middle Income Tax Offset, which was intended to be temporary.

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AUSTRALIAN LABOR PARTY

Battle over high-income tax cuts

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Original article by Phillip Coorey
The Australian Financial Review – Page: 1 & 6 : 13-May-21

Treasurer Josh Frydenberg has defended the decision to extend the low and middle income tax offset for another year in the May 2021 Budget. He argues that the tax offset will support aggregate demand and job creation, while he has not ruled out extending it again if circumstances warrant such a move. However, Frydenberg contends that the tax offset was never intended to be permanent and must end before the legislated stage-three income tax cuts take effect in 2024. Labor has not yet committed to supporting the tax cuts, which will benefit people on high incomes in particular.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY