Stunning amount Aussies will pay for tax cuts in phase three is revealed as the prize balloons to an extraordinary $254BILLION – here’s who will benefit
- Treasurer Jim Chalmers Confirmed Stage Three Tax Cuts Would Cost $254 Billion
- More than the Parliamentary Budget Office estimate of $243 billion over a decade
The controversial cost of phase three tax cuts has risen to $254 billion in a decade, just days ahead of budget.
Treasurer Jim Chalmers has confirmed that the $9,075 tax cuts for those earning more than $200,000 would cost more than the $243 billion recently confirmed by the Parliamentary Budget Office.
“From the last time we looked at it, I think we expect the equivalent cost for 10 years to be $254 billion,” he told ABC Radio National’s Patricia Karvelas on Thursday.
The previous coalition government, backed by opposition Labor Party, introduced sweeping tax changes in the third phase in 2019 during an election year, shortly before the pandemic.
Treasurer Jim Chalmers has confirmed that the $9,075 tax cuts, for those earning more than $200,000, would cost more than the $243 billion recently confirmed by the Parliamentary Budget Office
Laws have been passed to reduce the number of tax brackets from five to four for the first time since 1984 from July 2024.
How Much You Get Back Under Stage Three Tax Cuts
Tax liabilities for 2024-25 compared to 2022-23
This would abolish the 37 percent tax bracket and create a new 30 percent tax bracket for all individuals earning between $45,000 and $200,000.
For those earning more than $200,000, a new marginal tax rate of 45 percent would apply.
This means that those who earn more than $200,000 from filing their tax returns for fiscal year 2024-25 will be refunded $9,075 compared to 2023-2024.
Someone making $80,000, a level below the average full-time salary of $92,030 in Australia, would only get back $875.
Treasury expects gross government debt to exceed $1 trillion in 2023-24, following $300 billion in pandemic welfare measures in 2020.
The Australian Parliamentary Budget Office estimated that the phase three tax cuts would cost $243 billion over a 10-year period from 2024-25, in response to a question from Greens leader Adam Bandt.
In phase three, those who earn between the $18,200 and $41,000 tax-exempt threshold will pay a 19 percent marginal rate, while those earning more than $45,000 will pay the new 30 percent marginal tax rate.