According to new research, the Morrison government’s “all-or-nothing” tax plan is set to grant our highest earners $33bn in relief.
The Morrison government’s touted income tax plan will purportedly grant our highest income earners more than $33 billion dollars.
Morrison’s “all-or-nothing” plan is expected to be one of the first pieces of business pushed through parliament.
Simply put, the tax plan works like this:
- The first phase of the scheme will see an increase in the low and middle-income bracket, bringing the maximum payment up to $1,080 (up from $500)
- The second (due 2022-23) will increase see the lowest taxation threshold (19%) be widened for those earning $41,000 to $45,000.
- The third will see the 32.5% tax bracket lower to 30% for those earning $40,000 to $200,000.
Matt Grudoff of The Australia Institute has crunched the numbers, with the economist believing that the third stage is where is the issue lies, as those earning more than $200,000 will see $26 billion in benefits over the same timeframe.
As we know by now, the economy is in serious trouble, with our growth at roughly the same point as it was when the nation was recovering from the 1991 recession. In conversation with The Guardian, Grudoff said that any tax packages put forward should be “well targeted if they are to maximise economic growth…low- and middle-income taxpayers are more likely than high-income taxpayers to spend their tax cuts and stimulate the economy.”
According to Grudoff, the first stage will cost the budget less and benefit more people than the third stage, with the latter expecting to cost the budget $95 billion over five years. He recommended that the government scrub the final stage entirely, which certainly looks very like breathing space offered to the well-heeled at our expense.
With that being said, the official line is the polar opposite. As Scott Morrison mentioned last week that the plan is “all or nothing”, as has doubled down since, stating that “legislating our personal income tax plan in full – I underscore, in full – will be the first substantive business in the new parliament.”