Men will get almost twice the benefit from later stages of unlegislated income tax cuts as women: new research

The final stage of the Morrison Government’s unlegislated income tax plan, stage 3(a) favours males by a ratio of almost two to one, according to a new distributional analysis from The Australia Institute’s senior economist Matt Grudnoff.
The Morrison Government is yet to legislate the additional tax cuts announced in the 2019-20 Federal Budget, which builds on the tax package announced in the previous 2018-19 Budget.

Key findings:

  • In 2024-25, the first-year stage 3(a) comes into effect, about $11 billion will go to men and about $6 billion will go to women. This means men will get almost twice the benefit from the tax cut as women.
  • The top 10 % of taxpayers get 31% of the tax cut. Of that, 23% goes to men in the top 10% and 8 per cent goes to women in the top 10% of taxpayers
  • In 2018-19, the first-year stage 1(a) comes into effect, the split between women and men is almost equal (47% to females and 53% to males).

“Men are set to benefit the most from the Government’s tax cuts. The final stage of the tax cuts due to come into effect in 2024-25 will see men get two dollars in tax cuts for every dollar women get,” said Matt Grudnoff, senior economist at the Australia Institute.

“With the slowing economy, the government needs to be clever with its fiscal stimulus. The tax cuts to high income earners in 2024-25 are not well targeted and are too far off to help the economy right now.

“Not all the stages of the tax cut are so uneven. The first stage, which enjoys bipartisan support, has an almost even split between men and women. 

“As the tax cuts progress through the three stages, women get a smaller and smaller share. This is because the tax cuts increasingly flow to high income earners and men are much more likely to earn higher incomes than women. 

“The final stages of these tax cuts will further entrench gender inequality,” said Grudnoff.

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