Today the Albanese Government has introduced legislation to implement our cost‑of‑living tax cuts for middle Australia.
This legislation is all about delivering a tax cut for every taxpayer, and more tax relief for more people to help with the cost‑of‑living.
The changes in the legislation are all about relief and reform - more relief for workers and better reform for our economy.
The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 will deliver a tax cut to every taxpayer and bigger tax cuts to more Australians in a way that doesn't add to inflation or burden the budget.
We have found a better way to deliver tax cuts in a way that's better for the cost of living, better for returning bracket creep, better for women and the workforce, and better for the economy.
The legislation cuts two rates and lifts two thresholds and is the best way to provide more tax relief to more people and return bracket creep where it has the most impact.
The legislation ensures that from 1 July 2024:
- The 19 per cent tax rate reduces to 16 per cent (for incomes between $18,200 and $45,000)
- The 32.5 per cent tax rate reduces to 30 per cent (for incomes between $45,000 and the new $135,000 threshold)
- The threshold above which the 37 per cent tax rate applies increases from $120,000 to $135,000, and
- The threshold above which the 45 per cent tax rate applies increases from $180,000 to $190,000.
The legislation means all 13.6 million taxpayers will receive a tax cut - 2.9 million more than would have benefited from Scott Morrison's plan from five years ago - and 11.5 million taxpayers (84 per cent of taxpayers) will receive a bigger tax cut.
It means that 5.8 million women (90 per cent of women taxpayers) will now receive a bigger tax cut. Nurses, teachers, and truckies are some of the most likely to benefit with more than 95 per cent of those taxpayers getting a bigger tax cut.
The Government has also introduced the Treasury Laws Amendment (Cost of Living - Medicare Levy) Bill 2024 to increase the Medicare levy low‑income thresholds for 2023-24, which will benefit more than a million low‑income Australians as well.
Implementing the government's cost‑of‑living tax cuts and changes to the Medicare levy will ensure that more people get more help to ease the pressure they are under.
Cutting taxes for middle Australia is a central part of our economic plan - along with getting wages moving again, bringing inflation under control and driving fairer prices for Australian consumers.
