The result is out after the caucus meeting earlier today:
https://www.afr.com/policy/tax-and-super/what-the-tax-cuts-m…
https://www.news.com.au/finance/money/tax/winners-and-losers…
from AFR:
https://files.ozbargain.com.au/upload/476873/110049/screensh…
Are you affected with the updated stage 3 tax cuts?
And then end up with shitheads living right next to you having house parties at 2am with VCAT to stop you kicking them out?
I like for both times, I get practically no say at time of legislation, but the politicians will still say if we vote them back at next election it means it is a mandate.
It is as much consultation as i enter Wilson Carpark and in that split second i have accepted all their terms and conditions printed at the entrance.
Literally everyone is affected…
I lose ~$750 from the previous cuts but hey, i gain $4k
Overall, not really fussed.
Nice.
Somebody has to pay the taxes.
Nearly everyone agrees it is easier to pay taxes if you have lots of money, than if you don’t have much money.
The people earning over $180k are still getting the biggest tax cut.
If the Libs were genuine in their desire to reward the rich, they could have enacted these cuts years ago. Instead they devised a political wedge, and left the rich hanging out to dry. The LNP certainly were no friends of the rich with these tax cuts.
I'm sure we both agree the libs didn't want to enact the cuts because then they would've posted massive deficits (not that they didn't already..) and wouldn't have been the "superior economic managers" they pretend to be…instead looking to kick the can down the road to be another governments problem
I literally took a new job last month on the basis of the original tax cuts, now with these new changes it would have been better for me to stay at my old job… so in that regard rather pissed off.
However, The new tax cuts do help more people (unfortunately not me) so I support them.
I am getting a bit annoyed at the notion that earning over 180k automatically makes you rich… income doesn't always equal wealth. There are a LOT of people significantly richer than me paying considerably less tax.
I literally took a new job last month on the basis of the original tax cuts, now with these new changes it would have been better for me to stay at my old job.
Would like to know the maths behind this, if you're paying more tax, you are making more money, irrespective of the tax changes or not.
Effectively was on a job that paid $165k… It was extremely close to home, loved the job/people/boss/work etc. However got offered a position in the city at a different company that pays $200k, I figured the difference would mean $24.5k extra in my pocket under the original tax cuts. However now it means only a $20k difference… now given my commute has gone from 10 minutes door to door to 45-60minutes door to door (plus tolls/fuel/wear and tear on my car) suddenly the difference isn't really worth it. (it was a 50/50 call originally).
The main reason why I was trying to maximise pay was to be able to borrow enough money to buy a first house in Melbourne as a single person. The recent interest rate rises have massively reduced borrowing capacity and the competition at the cheap end of the market means you have to pay a premium for a crappy weatherboard home, whereas if I earn that $25k more it means I can borrow a bit more and buy a much nicer house which is better value for money.
Its also kinda frustrating just from the perspective of having to work harder in a more senior role with more pressure etc just to be able to buy an "average" house. But as i said in my original comment, while it sucks for me I am glad they are helping people on lower income. Its just annoying when people think earning $180k or more suddenly makes you rich… As someone renting and trying to buy a house, I don't exactly feel flush with cash or rich.
Copy. Makes sense. Certainly blows. Not set in stone though and any tax cut is better than nothing.
The silver lining i see is that making 10k concessional contribution to super may put you in better position than original tax cut, for purpose of buying first home using FHSSS as well as increased borrowing power.
Edit: no, won’t be better. I forgot about the 4k loss come from the 37% bracket, and not lowering the 45% bracket.
Sigh
Literally first world problems. Whilst the little kid walks 5 kms barefooted just to get a bucket of murky water and spend another 6 hours to hunt for their dinner only to be sleeping with insects.
Eh, the 200k job will probably look better on your CV and then you can go get a 250k job.
Or at least that's what Hockeynomics would suggest
If it's any consolation it's not actually 4.5k, it's $3250. That is if you stayed in your old job you still would have been $1296 worse off than when you factored in the original stage 3 rates into your calculation.
Any scope to negotiate hybrid WFH down the track ?
Yes you are not rich, people with a lower income are rich
People are so easy to manipulate. No one on $50,000 - $200,000 is really rich. We are just antagonised over the crumbs left to us by the rich. What Labor are doing is the classic "rob Peter to pay Paul". If they are any good, they could start by solving the house prices. Both parties are owned by Big Money. The real rich don't watch the news. They create it.
"rob Peter to pay Paul"
As in: Peter, i was going to give you extra 9k for absolutely no change to what you are doing, but now i am only going to give you extra 4.5k.
If they are any good, they could start by solving the house prices.
But they did! Is just they started, but have not solved, the housing price
People are indeed so easily manipulated, regardless of their political view.
False premises. No one has to give Peter 9k. It’s Peters $9k that he earned by specialising for years in what he does. It’s not a government handout.
Peter has to pay higher tax because of the tax anomaly called bracket creep.
If the politicians wanted to solve the wealth transfer crisis they’d go after the untouchables that made trillions in profit since 2019. Anything else is just smoke and mirrors.
And no, neither the left nor the right party will ever fix the housing crisis. They caused it.
because of the tax anomaly called bracket creep
Wake up the brackets aren't moving they don't creep anywhere its your wealth creeping so you are suffering from wealth creep.
Peter has to pay higher tax because of the tax anomaly called bracket creep.
Yeah, not following your logic mate. It is not an anomaly where one thing is forgotten or behaved differently to the rest. The political decision to achieve structural budget surplus affects more area than just income tax. Like GP bulkbilling rebate freezes, but cost of services rises and less gp bulkbill. Like defence spending. Like foreign aids budget.
What is an anomaly for example is that in heated housing market, a government hands out a freaking building grant to fuel the sector in the name of stimulating entire economy.
It’s Peters $9k that he earned by specialising for years in what he does.
There could be a number of reason peter has that much income for that year. He may have sold his investment property because he cannot afford the mortgage. May have changed jobs and cashed out his 20 years long service leave at 100k salary rate. May have unwillingly sold shares with high capital gains to pay for a divorce.
What is a false premise is thinking someone with high income for that year must be 100% attribute to their specialisation
It’s not a government handout.
It is a benefit from a government decision, so yes it is a government handout. Maybe not considered a social benefit thats all
@avoidfullprice: Building grants apply a downwards pressure on property value and overall speculation. There is a housing shortage.
they could start by solving the house prices
Curious how you think this is doable?
Any scheme or initiative that would try to do this would have the opposite effect as we've seen.
Also, politicians are disincentivised to solve the housing crisis because they ARE the rich who own MULTIPLE investment properties. They don't want to solve the problem because it doesn't benefit them.
Curious how you think this is doable?
An over supply causes competition between the seller
An under supply causes competition between buyers
What position do you think we are in now?
Both.
There is currently no policy that would result in an increased supply of new homes. The construction industry is already stretched to its limit with long wait times for good builders. Poor quality builders have been coming in and delivering rubbish without repercussion.
The only policy that would result in increased supply is one that causes the wealthy investors to offload. I don't see that ever happening.
Hey, cool it with the anti semetic remarks
The funny thing is if you're on $150k and live in Sydney, you're barely scraping by. Sad but true. As a nation we have chosen to invest heavily into housing and stuff everything else.
As a nation we have chosen to invest heavily into housing and stuff everything else.
On top of that, build housing cheap, cost lot to run/maintain and prop up the value instead of truly investing in quality housing.
On the other hand, if you live in Sydney, you are surrounded by one of the most beautiful cities in the world, with stunning beaches, stunning infrastructure around the beaches, the most incredible harbour in the world, where a typical ferry commute to work is better than most tourist ferries elsewhere in the country, an attractive inner CBD with actual monuments (Harbour Bridge, Centre Point Tower, Opera House) visible almost wherever the CBD is visible (very few cities have this), very good public transport (at least compared to the rest of the country), a lot of history and historical buildings (compared to the rest of the country), higher wages, more employment opportunities, vibrant and diverse population, etc.
What a total beat-up, you should work for Tourism Australia.
On the other hand, if you live in Sydney, you are surrounded by one of the most beautiful cities in the world, with stunning beaches
You got Bondi/Coogee strip of beaches, everywhere else is polluted. Australia also has a high rate of deaths from dangerous rip tides and Sharks - i'll pass.
Oh, you forgot in Sydney you get to experience Winter in Summer, for e.g as I type now in Sydney in mid-summer, it's pouring rain - beach? eh
stunning infrastructure around the beaches, the most incredible harbour in the world
You clearly havn't travelled outside Australia.
where a typical ferry commute to work is better than most tourist ferries elsewhere in the country,
LOL dude they just decommissioned 'Lady Northcott' after beating this donkey ferry for 48 years as a commute ferry.
an attractive inner CBD with actual monuments (Harbour Bridge, Centre Point Tower, Opera House) visible almost wherever the CBD is visible (very few cities have this),
Have you been to NY? Rome? Paris? London? you're seriously out of depths here
very good public transport (at least compared to the rest of the country)
Totally B.S - worst public transport on earth. Metro was only recently completed after blowing out of budget billions.
Sydney Trains is a disaster since 1970 with repeated track and train failures.
Buses are stuck in traffic
a lot of history and historical buildings (compared to the rest of the country)
History? the oldest monument you can see here is from the mid 1800s. compared to USA, EU and Middle East, that's like going to a antique auction trying to sell a $5 note made in1997
higher wages, more employment opportunities, vibrant and diverse population, etc.
Let me rephrase:
higher wages that have been knee-capped with 200% higher cost of living, decreasing employment opportunities due to influx of immigration, vibrant and failed diverse population resulting in extreme passive racism.
Seriously, go travel a little.
The funny thing is if you're on $150k and live in Sydney, you're barely scraping by.
That's a sweeping statement if ever I saw one and doesn't take into account anything like mortage, rent, lifestyle choices.
I know people who are on 300k who live paycheck to paycheck because they can't manage money, and people on less than 150k who own a house.
Damn.
New Stage 3 is fairer than before. We all know that the vast majority of the benefits of economic growth flow to the top in this country, so they can cough up this tiny sliver of wealth for the good of the nation.
Lots of disinformation/misinformation/confusion about the costings for this new Stage 3 at the moment.
PBO (Parliamentary Budget Office) has made public the newest estimates of the old Stage 3 (as of 19/01/2024), costing between $20.7B to $26.1B a year over the next 3 years (3 year cost totalling $70.7B AUD). Not much info about the new one so far.
Looks like a great change. Everyone still benefits including high earners and it's not completely focussed on the high end which was always fairly absurd.
No real reason to complain unless you're earning over $150k in which case at least you can cry into your wads of cash you have regardless of taxes.
Don't forget stage cuts were divided into three stages (this one is last), and the first two stages were for low-income earners, so it isn't absurd the last stage focused on the high end when they were omitted from the first two stages.
Stage 1 was the lmito for low income earners, which was temporary and has now ended.
Stage 2 was a pretty minimal tax change for those under $66k, giving them up to an additional ~$250 a year.
In no way do these cuts seem really equivalent to what was included in stage 3 cuts in terms of the size and impact. They were mostly token items to ensure the stage 3 cuts were voted through parliament
Well, the first two stages had benefits for people going up to about 120-150k actually, but the benefits tapered
Be nice if they indexed tax brackets and tax free threshold to inflation …. But of course pigs would have to fly before that ever happened..
These poll options are shite, and assume that everyone only cares about themselves. I'll be slightly worse off under the changes, but think it's a better system.
I'm not "annoyed".
Strong agree.
We need one more option:
We love to follow Biden and make a bigger mess!
No idea what Biden has to do with Commonwealth tax policy, but stay sharp! I heard a MAGA angel gets their wings every time someone post negatively about Biden.
Agreed.
Updated
long live Albo
potatoes will remain smashed…
Where is the "I earn below $150k, but (profanity) Albo for breaking his promise!" option?
where can I buy one?
If Albo promised to (profanity) your wife but later changed his mind, would you still be upset about that?
I'm very confused, most arguments are Phase 3 tax cuts should have never been a thing, but now the consensus is the changes to Phase 3 benefiting everyone is a good thing.
Were the tax cuts needed or not? If so, why?
The goal of tax cuts was to simplify our tax system. Albo kept the complexity and gave money to everyone completely ignoring the intent of the change.
NPC comment
How's the old stage 3 simpler? Removing a bracket makes it simpler? We live in 2024, accountants work with computers not with pencils and papers anymore. Computers can deal with 100 brackets as well as 3 brackets.
It's more complex than that. Read about the original desing in https://www.news.com.au/finance/work/taxavoiding-tradies-wer…
Jimbo is Biden his time
Classic one term government. Broken promises, snuck in with a 2 seat majority, completely screwed up the Voice taking it from 2/3 support to 2/3 against. Albo won't survive until the next election, and the best that Labor can hope for then is a minority in conjunction with the Greens.
Downvoters have no idea how the voting public work. Good luck with your projects.
Nice one ATO
Does anyone know if they are also going to fiddle with the base rates?
Here they are as they are now.
<18K $0
45k-120K $5092
120k to 180k $29467 Bit of a jump that's around 5 TIMES more right from the get go than the tax bracket below.
180K and over $51,667 that's another huge jump.
Those are before th percentages kick in.
New Tax = IF($A2<=18200,0,
IF($A2<=45000,($A2−18200)×0.16,
IF($A2<=135000,4288+($A2−45000)×0.30,
IF($A2<=190000,31288+($A2−135000)×0.37,51638+($A2−190000)×0.45)
)
)
)
IF(condition, value if true, value if false)
Huh?
@[Deactivated]: Posted below. From what I see at the ATO, there is a minimum base rate we pay we pay and then the percentage on top of that.
@[Deactivated]: I see, so back to my question, does anyone know if those base rates are going to be fiddled with?
@EightImmortals: These “base rate” numbers are just for linking (alighning) segments of the graph, so the graph is continuous, without jumps. You cannot “fiddle” those.
@EightImmortals: You'd have to understand what you are asking for before you could get an answer you'd understand unfortunately.
I'm not sure you understand what you are looking at here. We don't have base rates, we have a progressive tax system.
As such, the above isn't 'before the percentages kick in.' It's an illustration of what the rate ends up being, to make it easier to calculate.
Who me?
Maybe, here the link to the ATO, let me know how I've misunderstood it?
https://www.ato.gov.au/tax-rates-and-codes/tax-rates-austral…
$18,201 – $45,000
19c for each $1 over $18,200
$45,001 – $120,000
$5,092 plus 32.5c for each $1 over $45,000
$120,001 – $180,000
$29,467 plus 37c for each $1 over $120,000
$180,001 and over
$51,667 plus 45c for each $1 over $180,000
It's not a base rate. It's a calculation to make it easier to calculate how much tax you pay.
Someone on exactly $45,000 pays $5,092 tax due to being taxed 19c on every dollar over $18,200.
Someone on $55,000 pays $5,092 plus 32.5 cents on the extra $10,000, so $8,342.
"Don't give poor people money, they're just going to spend it! Give it to us instead"
Zelensky?
This is just more carrots to distract the sheep from the real causes of high cost of living, corporatism and mass immigration (both of which go hand in hand and both parties are happy to placate at the expense of citizens).
The original 3 stage change was meant to simplify the tax rates and encourage participation. The "redistribution" of tax cuts is simply doing what we already do but without any tangible reform on personal tax that better address indexation and add incentives for people to work more. Just remember, if the top earners that carry the majority of tax burden stop working, the bottom half wont be able to line up at Centrelink because there wont be money to give out. Becareful how much you squeeze the hand that feeds you.
Just remember, if the higher income earner stops working, someone will take over the job or the job isnt needed in the first place.
Also to remember, income tax is just one of a few tax revenue sources for the government.
Personal income tax is a third of the government's entire annual GDP revenue. High income earning tax payers represent a disproportionately high amount of that incoming revenue in Australia.
The fastest way to ruin any economy and send inflation through the roof is to make decisions that cause your high income earning tax base to shift their investments out of the state/country and then move away with them. The most impactful of those decisions that will trigger that result is increasing the tax burden on those who already pay the highest amount in tax.
It's just basic economics.
The Government has 1000's of financial levers they can pull via reigning in their reckless spending on welfare, arts, universities and the public service bureaucracy. But instead their pissing more money up the wall and just taxing those working hard to pay for it.
House prices would go down tho
House price increases are being driven by the immigration flood and foreign investors. They aren't using money earned in Australia to buy housing here. This will have no effect on the housing market in that regard.
All taxing the top tax bracket even more results in, is shrinking the tax base. Which in turn leads to the government making up for those shortfalls by layering more and more taxes on low to middle income earners to pay.
Where I work there's a whole bunch of people on over $300K so they're losing a whole bunch of cash and they were complaining about it at lunch today. I sat there playing the world's tiniest violin for them all.
I think they only lose 4.5k? Over a year that would be peanuts for those guys
I sat there playing the world's tiniest violin for them all
Is that because of your tall poppy syndrome and insecurities?
Or maybe it has something to do with the fact that after the new tax rates come into effect their net income after tax is still more than double mine.
2x your income yet pay 5x the tax you do. Just say you don’t like people doing better than you
Those type of people will never be happy, getting a massive tax cut already still isn't enough huh?
Would you be happy being treated like a wallet with legs by the whole country?
I lost part of my promised tax cut. I'm fine with that. What I really want is for the bracket to extend beyond either 180k or 200k. Someone earning 300-400k should be taxed differently.
a) They are taxed differently, that's the whole point of a marginal tax rate not applying to the majority of your income until you're well beyond a threshold.
Someone on 300-400k pays 38-42% in taxes instead of someone on 180-200k who only pays 28-30%.
b) The government closing the many incentives, loopholes and tax minimisation techniques those with large incomes and subsequent asset portfolios use to lower their taxable income, or for that matter, corporate tax avoidance, would make a much bigger difference to the bottom line and the disparity vs. someone on 180k with a mortgage on a house they actually live in.
What I really meant was there should be an even higher bracket.
lets go further and tax capital more than we tax labour, instead of the other way around :(
Hmmm…