Next Tuesday, Treasurer Josh Frydenberg will deliver the 2022-23 budget. As it is only 2 months from the next federal election, the budget will be even more politically charged than usual.
And while there will be the usual attempts to suggest better wages growth is just around the corner and those on low-to-middle income earners are benefitting the most, we should watch out for the almost guaranteed spin around tax cuts.
The Centre’s Fiscal Policy director, Greg Jericho, notes in his Guardian Australia column that the low-to-middle income tax offset (LMITO) was meant to be discarded when the Stage 2 tax cuts were introduced. However because doing so would have delivered no net benefit to people earning below $90,000 the government extended the offset in the 2020 budget.
It extended the offset again last year claiming it was providing tax relief to “10 million low-and-middle income earners” despite it actually doing nothing other than keeping the tax rate of those workers at the same level.
We can expect the same to occur next week.
Budget spin is always a sight to behold, but we are now at the point where income earners are being told they are getting a tax cut that does not actually see them pay any less tax.
Meanwhile the Stage 3 tax cut that will deliver a cut of up to 4.5% for those earning $200,000 remains in place.
Spin and imaginary tax cuts for some; truly excessive tax cuts for others.
Between the Lines Newsletter
The biggest stories and the best analysis from the team at the Australia Institute, delivered to your inbox every fortnight.
You might also like
Analysis: Will 2025 be a good or bad year for women workers in Australia?
In 2024 we saw some welcome developments for working women, led by government reforms. Benefits from these changes will continue in 2025. However, this year, technological, social and political changes may challenge working women’s economic security and threaten progress towards gender equality at work Here’s our list of five areas we think will impact on
Go Home on Time Day 2024: Exposing the $91 billion rip-off smashing exhausted Aussie workers
Despite new Right to Disconnect laws coming into force earlier this year, new research reveals Australians are still working an average five weeks’ unpaid overtime each year.
Ensuring workers’ safety in the climate crisis
As I watched the fires in Los Angeles unfold in January this year, my mind of course reflected on the 1999-2000 Black Summer bushfires in Australia. Both these seasons have wrought significant damage to humans and other animals, and to land, infrastructure and property. There has been a huge personal, collective and financial toll involved.