The Albanese government is about to have to make a really important decision.
It’s going to have to decide what’s more important: supporting Australians who are financially under water, or keeping an election promise.
And it’ll have to do it soon. It’s already working on its May budget, now just six months away.
That choice will affect almost every Australian, and it could shape whether you’re thousands of dollars a year better off – or not – from July next year.
[...] When asked in an Australia Institute survey what was more important – keeping a promise or reacting to changing economic circumstances – 61% picked reacting to changing circumstances.
Even among Coalition voters, 56% supported reacting to changing circumstances.
It puts the Stage 3 tax cuts in play. There’s still time, and plenty of electoral and economic reasons to rejig them.
Tax bracket creep. The tax brackets haven’t been adjusted despite average salary going up. So those who aren’t mega super wealthy are now moved into the next tax bracket and hit hard. It’s a middle class issue.
Indeed, the tax brackets need to be shifted every now and then in order to keep track with inflation (due to not being automatically adjusted). Moving the bracket cutoffs upwards is not a bad idea, though I disagree with the implementation - it really should have been done by raising the tax free threshold and working upwards through all the brackets.
Didn't they do that in the stage 1 and 2 tax cuts? https://www.superguide.com.au/how-super-works/income-tax-cuts
They raised the upper bound of the 19% bracket but left the lower bound the same, so the tax free threshold remains the same. The additional low income tax offset in stages one and two was useful to help reduce the effects of bracket creep on the lower end of the scale but unfortunately it was only temporary.