Responding to reports that Stage 3 of the government’s tax cuts, voted into law by Liberal and Labor, may not be fully repealed after the next election, Greens Leader, Adam Bandt, has called on Labor to join the Greens in taking on the government by ending the speculation and confusion around their position on the most radical, regressive tax proposal in Australian history.
“These tax cuts, whether you take the stages separately or as a whole, are a radical ideological flattening of our revenue base,” Bandt said.
“While stage 3 is the most egregious example of reverse Robin Hood, the whole package favours higher income earners. With a price tag in the hundreds of billions of dollars, these tax cuts mean huge looming cuts to services.
“At the same time as JobSeeker and JobKeeper were getting cut, Labor and Liberal teamed up last week to give millionaires an extra $2,500 per year. Any party claiming to be even slightly progressive should join the Greens in taking on the government by immediately and clearly ruling out stage 3.
“After first voting to give millionaires a $11.5k tax cut, Labor now says they may wind it back so millionaires get ‘just” get $8k a year, instead of $11k. That’s not good enough. This would mean billions of dollars less to spend on job creation, keeping JobSeeker at a liveable rate or investing in a clean, renewable economy.
“By voting through key Budget measures last week, Liberal and Labor have already backed in $99b a year in corporate handouts, and now they’re both considering further tax cuts for millionaires too,” Mr Bandt said.
Stage 3 is set to lift the 32.5c rate bracket from $45k-$120k to $45k-$200k (and then simultaneously changing the 32.5c per dollar rate to a 30c per dollar rate) and lift the 45c rate bracket from $180k+ to $200k+
When moving from the stage 2 to stage 3, the following will take place for different income cohorts:
- Everyone under $45k per annum sees no change in their tax compared to just Stage 2
- Someone on $60k per annum reduces their tax obligation by $375 compared to just Stage 2
- Someone on $120k per annum reduces their tax obligation by $1875 compared to just Stage 2
- Someone on $180k per annum reduces their tax obligation by $6075 compared to just Stage 2
- Everyone earning over $200k per annum reduces their tax obligation by $9075 compared to just Stage 2
Reports of Labor’s position in relation to stage 3 suggests that they will remove the changes to the 45c bracket so that very high income earners reduce their tax by $6075 instead of $9075.
When you combine Stage 2 and Stage 3 and compare to the LMITO, the numbers are even more regressive:
- Everyone under $37k per annum sees no change to their tax compared to the LMITO only
- Someone on $60k per annum reduces their tax obligation by $375 compared to LMITO only
- Someone on $120k per annum reduces their tax obligation by $4125 compared to LMITO only
- Someone on $180k per annum reduces their tax obligation by $8505 compared to LMITO only
- Everyone earning over $200k per annum reduces their tax obligation by $11505 compared to LMITO only
If Labor were to remove the 45c threshold change, but keep the rest, then the highest paid in the country will be $8505 better off than pre-Stage 2/3 rather than $11505 better off.