The Australian Government is considering whether to speed up the introduction of AUS$10 billion (US$6.4 billion) in income tax cuts for up to 12 million of its citizens.
The tax cuts, worth up to AUS$1,350 (US$867) for median to high earners, would benefit 94% of all taxpayers. But Government sources told SMH that it was now unlikely there would be a major tax announcement in December's mid-year economic update. Instead it would more likely be saved for the 2 April Budget, which has been brought forward ahead of an expected May election.
The cuts would see all income between AUS$40,000 (US$25,679) and AUS$120,000 (US$77,038) taxed at a single rate of 32.5%. The offset for low-income earners would be increased to AUS$645 (US$414) per year and the 19% tax bracket raised from AUS$37,000 (US$23,753) to AUS$40,000 (US$25,679).
Fuelling the move is the Government’s self-enforced “tax speed limit” of 23.9% of gross domestic product. Prime Minister Scott Morrison said earlier this year: "That is as high as we believe taxes should be as a share of the economy and we will be sticking to that plan."
But the limit will be breached next year if further tax cuts are not introduced on top of those delivered in 2018. The Government’s own budget projections show taxes will reach 24.1% in 2020.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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The Australian Government is considering whether to speed up the introduction of AUS$10 billion (US$6.4 billion) in income tax cuts for up to 12 million of its citizens.
The tax cuts, worth up to AUS$1,350 (US$867) for median to high earners, would benefit 94% of all taxpayers. But Government sources told SMH that it was now unlikely there would be a major tax announcement in December's mid-year economic update. Instead it would more likely be saved for the 2 April Budget, which has been brought forward ahead of an expected May election.
The cuts would see all income between AUS$40,000 (US$25,679) and AUS$120,000 (US$77,038) taxed at a single rate of 32.5%. The offset for low-income earners would be increased to AUS$645 (US$414) per year and the 19% tax bracket raised from AUS$37,000 (US$23,753) to AUS$40,000 (US$25,679).
Fuelling the move is the Government’s self-enforced “tax speed limit” of 23.9% of gross domestic product. Prime Minister Scott Morrison said earlier this year: "That is as high as we believe taxes should be as a share of the economy and we will be sticking to that plan."
But the limit will be breached next year if further tax cuts are not introduced on top of those delivered in 2018. The Government’s own budget projections show taxes will reach 24.1% in 2020.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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