As the Budget outlook improves, with most of the benefits of Stage 3 tax cuts going to those earing over $120,000, over 80% of workers will be short-changed
Yesterday’s mid-year economic and fiscal outlook (MYEFO) provided some pleasing news for the Treasurer, Jim Chalmers. But higher revenue does not mean a stronger economy nor that households are better off.
While the Treasurer was releasing the latest budget numbers the annual figures for median earnings were released by the Bureau of Statistics.
These figures showed that the median weekly earnings in August this year were $1,300 – a rise of 4.2% from last year, which was less than the 5.4% increase in inflation.
That weekly amount translates to $67,600 in annual earnings.
People earning that amount will get just $565 from the Stage 3 tax cuts (0.8%) while someone on $200,000 – well in the top 10% of earners will get a 4.5% cut worth $9,075.
The Treasurer told ABC 730 on Wednesday night that the government has not changed its position on Stage 3 and that “We think there is an important role for returning bracket creep where governments can afford to do that.”
The problem is the Stage 3 cuts are mostly focused at rewarding those on high incomes, who are least affected by bracket creep.
If the Government was truly worried about using the bonus revenue from higher export prices to assist low and middle-income earners it would care more about those on the median income of $66,700 than those in the top tax bracket and top 10% of income.
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