The Stage 3 tax cuts, which will essentially create a flat income tax system, have always been clearly biased towards high-income earners. For those earning over $200,000, the tax cuts represent a 4.5% cut compared to just 0.6% for someone on the median income of $60,000. But this week, the Parliamentary Budget Office has released costings that detail just how skewed the allocation of money is to the richest in our society.
As labour market and fiscal policy director, Greg Jericho notes in his Guardian Australia column, the PBO estimates that of the $243.5bn that the tax cuts will cost in their first 9 years, 48% will go to people earning over $180,000, and 77% will go to the richest 25%.
In the first year of operation, the richest 1% of income earners will get the same benefit from the tax cuts as will the poorest 65%.
Greg Jericho notes that in 2024-25, $12.7bn of the $17.7bn annual cost of the tax cuts that year will go to those earning above $120,000. That is almost the same amount expected to be spent on Jobseeker payments that year.
The Stage 3 cuts are designed to favour the wealthy and reduce the level of revenue which in turn will force cuts to spending and programs that assist the most vulnerable.
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.
The misery business: why economists should cheer up about low unemployment
Record numbers of Australians are employed – that’s a great thing, despite what the interest rate doomers are telling you, says Greg Jericho.