Members of Parliament among those who benefit the most from the Stage 3 cuts

by Greg Jericho

Taxation data shows which occupations will get the biggest cuts – and how few people work in them

Analysis of the latest ATO Taxation Statistics reveals that high-paying occupations such as Members of Parliament and Judges are among the occupations that will benefit most from the Stage 3 tax cuts.

Sometimes talk about the Stage 3 tax cuts can get a bit confusing. Talking about what percentage of total benefits will go to the richest 10% for example can seem a bit too abstract. Fortunately, the ATO releases data on the median incomes of 1,154 different occupations – from the 53 goat farmers, to the 359,780 bottle shop attendants; from the 67,000 fast-food cooks earning a median income of $17,168, to the 794 judges earning a median income of $428,758.

Using this data we are able to work out what size tax cut workers in each occupation will get and what percent of all workers will get at least that amount.

Someone on the median taxable income of around $58,000 – such as copywriters, bus drivers, and pest controllers – will get a tax cut of $330 – or a little over 0.5% of their income. Someone who earns $90,000 a year, which puts them in the top 15% of all occupations, will get a tax cut of around $1,125 – or 1.25% of their income. This includes occupations such as advertising managers, building construction supervisors, and radiographers.

But from here we really see the benefits start to increase.

What we find is that those occupations with a median income of above $120,000 see their tax cuts increase dramatically.

Stockbrokers, who have a median income of $165,030, will get a $5,027 tax cut (3.04% of their income), while Members of Parliament who have a median income of $221,733 are among the 33 occupations which get the maximum tax cut of $9,075.

While those on median incomes get just a 0.5% tax cut, MPs who legislate the Stage 3 cuts will get a 4.1% cut.

The Stage 3 tax cuts are very poorly designed to deliver the greatest benefits to the very few. MPs for example earn 3.3 times what a general nurse on $67,680 does, but MP’s tax cut is 16 times the $570 cut those nurses would get.

The Stage 3 tax cuts must be dumped and replaced with cuts that actually improve the taxation system and deliver benefits to those who need them the most.

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