In defending the Stage 3 tax cuts in parliament, Angus Taylor inadvertently highlighted the real benefits for low-middle income earners comes from Stages 1 and 2.
Today in parliament the Greens MP, Elizabeth Watson-Brown moved a motion calling on the Albanese Govt “to scrap the stage three tax cuts “. The only member of the ALP to speak to the bill, pointedly did nothing to argue the merits of the Stage 3 cuts and focussed on cost-of-living issues, while the shadow Treasurer Angus Taylor decided the Stage 3 cuts needed some barracking.
Unfortunately, Taylor’s argument only served to highlight how poorly targeted the tax cuts are.
Rather than talk up any of the benefits of the Stage 3 cuts, Taylor resigned himself to talking of the “full implementation” of the Turnbull/Morrison tax plan, which meant including Stage 1 and 2.
He provided the example of a hairdresser on $60,000 who would get a tax cut of $1,455 and a teacher on $70,000 who would be $1,705 better off.
What he failed to explain to parliament is the hairdresser would only be getting a $375 cut from the Stage 3 cuts, having already received $1,080 from the Stage 2 tax cut. Similarly, the teacher has already received $1,080 from the Stage 2 tax cut, and will get just $625 from Stage 3.
Taylor of course did not mention anyone earning less than $45,000 because they receive no benefit at all from the Stage 3 tax cuts. Oddly however he did not mention the rewards for someone on $50,000. They would be $1,205 better off in 2024-25 compared to 2017-18, which sounds quite good. Perhaps however he did not wish to note that just $125 of that benefit comes from the Stage 3 cuts.
Taylor however did mention a diesel mechanic on $100,000 who would be $3,040 better off. Such a person would at least get a sizeable Stage 3 cut – some $1,375. Taylor however stopped there. He had no desire to for example talk of an investment broker on $140,000 who would be getting a $3,275 tax cut from Stage 3 on top of the $2,430 cut they have already received from Stages 1 and 2.
The Stage 3 tax cut of 2.43% for someone on $143,000 is equal to the entire tax cut Taylor’s hypothetical hairdresser of $60,000 would get from Stages 1, 2 and 3.
Nor did he note that someone on $200,000 – ie earning some 3.3 times the hairdresser – would all up be getting a tax cut of $11,640 from Stage 1, 2 and 3, and $9,075 of that from Stage 3 alone. In effect someone earning 3.3 times the hairdresser gets 8 times the total tax cut from all three stages and a jaw-dropping 24.2 times the Stage 3 tax cut.
That Angus Taylor was unable to talk of the benefits of the Stage 3 cuts on their own and that the government was about to argue in their favour highlights how the Stage 3 cuts are without defence. They massively favour the wealthy and should be dumped.