Anthony Albanese and Peter Dutton face a half trillion-dollar tax problem – without a change, Australians will face a generational high tax hit.
Australians face a half trillion-dollar increase in their personal income tax over the next decade if tax rates and thresholds remain frozen in time as a new report warns the federal budget relies increasingly on working people to sustain government spending.
When this year’s stage 3 tax cuts were originally announced by then-treasurer Scott Morrison, he argued they would effectively end bracket creep – the process by which a person’s average tax rate goes up as their income moves through a tax bracket or into a new one. The budget office, in its analysis of the federal government’s mix of taxes, found the income tax share will resume climbing next year and surpass the 42.9 per cent mark in 2027-28. By 2030-31, it will have reached 44.3 per cent and, without change, will hit 46 per cent by the middle of the 2030s.
“Given how hard it is to change Australia’s tax system, that’s the future. We’re doomed to ever higher tax collections from working people.” “Combined, these two shrinking revenue bases represent $60 billion in lost revenue by 2050,” it found.
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