Prime Minister Anthony Albanese takes a hit at the crippling battle against inflation by announcing several monumental tax cuts. He pledges change for every Australian taxpayer, with emphasis on Middle Australia, claiming supporting lower to mid-earners was the right thing to do.
It’s no secret that Australia remains in a state of recovery following the COVID-19 pandemic, with inflation peaking at 7.2% in 2022. Although inflation currently sits at a steadier 4.3%, global conflict and supply issues stagnate further decline.
So, are tax cuts really the answer to Australia’s financial concerns? Stick with us as we unravel Albanese’s speech at the National Press Club in Canberra on the 25th of January, 2024, and detail what it means for you.
What Does the Tax Cut Entail?
All tax adjustments come into play from the 1st of July 2024. Albanese reassured listeners that it’s just the beginning of providing targeted cost-of-living support to all working Australians, regardless of their tax bracket.
Below, we’ve broken down the revised rates and thresholds:
The lowest income tax rate will decrease from 19 cents per dollar to 16 cents. Resultantly, taxpayers earning less than $45,000 earners will face lower liabilities. The government also reduces payable tax on the first $45,000 an individual makes in one year.
In reference to “early educators, aged care workers, and cleaners earning $50,000 annually,” Albanese confirms savings of up to $900 a year.
Our PM stated that the average Australian wage stood at $73,000 annually. These earners will see yearly tax cuts of $1,500, almost double the savings guaranteed on the previous plan.
The Medicare Levy threshold will extend from $26,000 to $32,500, meaning more low-income earners will become exempt from this payment. The PM guaranteed that alternative measures will see them pay less tax.
Income earners of up to $135,000 will follow the new threshold of 30%–a decrease from the previous 32.5% rate. This adjustment concentrates on support for Middle Australia, largely impacted by soaring living costs.
Top Tax Rates
For the first time since 2008, the top tax rate threshold will increase from $180,000 to $190,000. Revised measures offer cuts of approximately $4,500 for people earning $190,000 or more.
So, How Does This Affect the Average Taxpayer?
Despite online speculation, people earning $18,200 or less will remain exempt from tax payments.
Ultimately, Albanese strives to “give back to deserving Australians” while navigating higher living costs. Greater take-home pay intends to encourage parents to go back to work, helping businesses elevate their workforce.
Resultantly, improved take-home pay helps to accelerate the economy fairly and sustainably.
Benefit from Individual Tax Advisory Services
Do you require further support navigating these extensive tax revisions? Enlist Advisory One’s professional individual tax services to maximise savings and comply with ever-changing regulations.