Stage 3 tax cut is now live, what would you spend the extra money on or would you salary sacrifice to your super?
What Would You Spend Stage 3 Tax Cut Saving on?
DaHuntz on 02/07/2024 - 11:11
Last edited 02/07/2024 - 12:50 by 1 other user
Last edited 02/07/2024 - 12:50 by 1 other user
Comments
Jimflation is rapidly turning into a jimcession
Yes worldwide inflation from covid and Russia being dicks is our treasurers fault.
World wide inflation has settled down…. Australia is the only OECD nation with inflation rising….
And tax cuts and extra Australian government largesse hasn't even kicked in yet. Rates may not go up, but they won't be coming down this year like they are in other countries.
@R4: I reckon they'll go up tbh. I dunno why the banks are so optimistic. Maybe they just want to keep confidence and spending up.
yeah lucky has no mortgage.
Bricks & a fire pit.
Users with free unlimited gas love this one simple trick.
passes out in lounge
Build a man a fire and he'll be warm for a night. Teach him how to build a kiln from firebricks in his living-room and he'll be warm for the rest of his life.
Extra super contributions for me - now up to 16%
this. Anything over the super contribution limit, will just be funnelled to partner as after tax contributions and then claimed at EOFY.
Funnelled, interesting terminology
Could up their contributions but it's just easier doing after tax and then claiming. Nothing nefarious.
Enough for 9L Olive oil for the year round.
the extra $30 I see in my pay each week will barely move the needle on my personal finances.
$30 a week for 10 years at 5% would give you over $20k.
Not to be sniffed at.
too bad a loaf of bread will cost 5k
nope
Wanna make a bet in 10 years time a loaf won’t cost 5K?
@redfox1200: I find it a shame the serious and intellectual comment gets downvoted from R4 and the exaggerated non-contributing comment gets the upvotes.
Ozbargain reality
New plasma tv
ONLY plasma will do, they are keeping the place warm in winter.
You might get enough for a generic remote.
I will spend my $20/week at Colesworths and still be worse off than I was last year
BNPL on hookers
As long as I don’t catch crabs
Bruce, is that you?
Bruce is BNC7PL (Buy Now, Channel 7 Pays Later).
Mortgage. Guaranteed 6% return after tax. Difficult to beat that.
There's a decent chance that the next RBA interest movement will be up, not down.
https://www.asx.com.au/markets/trade-our-derivatives-market/…
Put the money into mortgages and it reduces your balance, reduces your interest costs, and it's not spent on goods and services where it contributes to pushing up inflation. A solid win all round.
It's only 6% after tax if you're an owner occupier. It's 3.1% after tax if you're an investor.
Otherwise, agree. Buy property, pay it off, buy more property. Just spread your properties around to minimise land tax.
Barely pays for Victorian land tax increases
Anyway, hopefully RBA pushes up rates soon and we head for a nice juicy recession. Get some bargains on the market. Happy to take the risk of 'losing my job'
bargains about to be gone, every high income earners pay just went up like 5k, thats another investment they can support.
The only way I'd be fine with wiping out HECS debt is as long as it's retrospectively applied to those who worked hard to pay theirs off….
And people who need medicare can only access it as long as healthy people get an equivalent cash payout.
Not sure how you can equate medical care with education. One is voluntary whilst the other is not. Btw thanks for the neg
It would, in fact, be fairer if the Medicare levy/private health surcharge had modifiers for healthy habits and keeping a good BMI/blood pressure etc
I mean, do you think it's fair that people with a perfect driving record should pay the same car insurance fees as someone with 3 licence suspensions?
@justworld: or genetic test everyone and only insure the healthy ones.
(profanity) it, the world is overpopulated, we could genetic test and then cull the weak.
the world is overpopulated, we could genetic test and then cull the weak.
Huh, looks like the comment section devolved into eugenics 20% quicker than usual today, guys
People who need pensions can have those amounts accrued as a HECS-style loan to be repaid from their estate (if any).
and people who lost their license get a cash payment equivalent to how much gets spent on roads for everyone else.
That's quite literally the "screw you I got mine" approach, not a great plan
I'd agree if I had a HECS debt, but I don't so I'll take the cash thanks.
wiping HECS would have almost zero long term benefits.
I've accrued and repaid two HECS debts under the current system. It works well imo.
Raiz may be
I will use it to compensate for my increasing poverty as a result of the cost of living increasing far faster than my salary over the past 5 years.
It's not extra money, its years of bracket creep that has been returned.
sadly it only returns a tiny portion of bracket creep and it will all be stolen back in just a handful of years. It was a huge opportunity missed to do something real about bracket creep.
I would’ve built something that would’ve benefitted the community. Maybe a school(s) or a hospital(s), since you know, our population is booming.
Why real estate of course, as is the Australian way.
Into my super, ETFs and mortgage. As a household, our income taxes are going down by a fair bit - we would have been better with the original stage 3 cuts but ho hum.
how will you decide how to split your $30 extra a week into super/ETF/Mortgage
?
It's much more than $30 a week.
"Stage 3 tax cuts" were cancelled by Labor in a broken election promise. My 'revised' take-home pay will be fully consumed by the extra mortgage interest.
Interesting what it sounds like if you replace "Morrison's" with "Our Labor election promise"
If any party was serious about addressing bracket creep, they'd simply index the brackets.
not a problem if you don't have a mortgage
Do you mean the blatant disregard for the principle of democratic mandates (including waiting until the 11th hour to execute the switch), or the lower than promised take home pay? Having a mortgage makes no difference to either of these.
The former should be a concern to anyone with an interest in our country, and the latter for anyone who's paying income tax now or in the future.
Small violin for your $180K+ income.
@surg3on: If only. There are no future changes committed by any party to the best of my knowledge, so we're stuck with the current settings for a while, no matter what happens to wages and inflation from here.
The top 45% tax bracket was set at 180k in 2008-09. If had simply been indexed to wage inflation since then, today that threshold would be over 275k for 2024-25. The medicare levy has also increased since then.
If you do the same since the 2012-13 rates then you get thresholds of about 24k / 48k / 105k / 236k for 2024-25. Notice how the top bracket hasn't been adjusted at all while these other numbers are pretty close to what we actually have today? It makes no sense, and to me that makes it unfair. Whether it affects me personally is not relevant (which it doesn't at this point).
Sorry if I'm not seeing this bracket now starting from 190k as a "cut". The original "stage 3" wasn't a cut either. Pensions were adjusted for all recipients without fail - why not the income tax rates for the people who actually worked for their money?
@surg3on: Not really comparable to 45 years ago IMO- real wages growth, no CGT, assets vs income balance, lower asset prices, full pensions etc
My new car needs a chrome delete.
my tax cut is approximately one months rent.
Taking the wife and kids to KFC for date night.
Sort of balances out the superannuation increase that makes take home pay lower. Company increases the superannuation payment by reallocating it from annual salary.
This can occur if your employment contracts are worded in terms of a Total Remuneration Package (TRP) that includes the superannuation contributions.
The employee’s total take-home salary can decrease without breaking any laws. In other words, the employer can absorb the increased super contributions within the packageAny employer who does that is a dog.
I have personal experience of this with one of the companies that makes up the ASX 100.
They also make sure they pay the lowest rate possible when it comes to pay increases for the lower level employees.
Unfortunately for many of their staff they operate in an industry with a small number of companies so they can't easily vote with their feet.
It's not all bad - conditions are pretty reasonable but their policies regarding staff are basically to minimise everything they can legally whilst telling their staff how much they are valued.Dogs
Mine is worded in terms of TRP, but my employer increases it with the super increases, as well as increases and bonuses around October each year.
pokeinvesting
If rates do not go up then salary sacrifice more into Super.
Cash bribe to the HR team, so I can finally get a entry level role.
For me it's worth a schooner of Reschs during $7 Happy Hour. I shall toast OzBargain prior to the first sip.
A pack of chewy!
on the other bills that raised their prices like health insurance and rego and internet tooo now.
Straight into the offset.
Coming off a fixed home loan rate in a few months so will go towards the increased repayments.
Asahi instead of rivet.
Let me think about it for a sec… oooooppps it's gone already :(
drop it into the ever-growing hole that is cost of living.
I won't notice it. It will just go on my mortgage like the rest of my extra $. Easy to transfer out if I really need it, but I find I'm less likely to spend it than if I have it in one of my offset accounts.
We are a DINK couple, professionals. The monthly take home increase just knocked 8 years off mortgage. House is due to be finished November.
Offset, but it will be long gone prior to that considering current mortgage rates.
I am sure it will be rapidly soaked up by the next interest rate rise and continuing inflation.
Still in the process of building up my emergency fund. The extra cash will go towards that. In order:
- Emergency fund
- Decreasing my “bad” debt
- Salary Sacrifice into Super
- Increasing Offset account (in parallel with above)
- Increasing investment portfolio (in parallel with above)why not pay off your bad debt first and if an emergency pops up that you need an interest loan for, just cop the interest penalty then and only then rather than now and the whole time you're saving up the emergency fund?
Wow, I actually thought I was fairly financially literate, but never thought of this.
Will start doing this!
Thanks for the suggestion!
I remember when we were all told solar would save us.
Now we live in a reality where power produced from panels is taking down the system and we pay more because solar is disrupting the system.
Nuke Aus up Problem solved high power produced all times of the day. BOOM put my tiny tax saving into producing something positive for the country for once.
Wind farms epic fail.
Solar on every house without a battery fail.Produce 4x the power you use still get a power bill makes sense.
Cheers AUS.
Are you sure you posted in the right thread?
Just got email from energy provider, gas and electricity going up approx $1000/year due to new market rates.
Tax 'saving' just got offsetMortgage or 'living expenses' in general. Will likely have a handful more interest rate increases to go - maybe another 3-4 increases yet to come. There are not enough people suffering, homeless or bankrupt yet. Will need to see things get a lot worse before we see any relief.
On Monday morning 1st July I receive an email that my mortgage repayments are increasing and now 80% of my tax cut is already taken by the increase in my mortgage repayments.
Come on, Home Insurance up 38% which eating up all tax cut already, don't forget Electricity service fee up 40% too, still scarily to see Council fee, only way is up, there nothing down except more Business closing down.
will top up my salary sacrifice into Super from the current $27.5k to $30k
Time for Jim-Flation
Good luck to those with a mortgage