What Labor’s stage three tax cut backflip means for Bunbury

Oliver LaneBunbury Herald
Anthony Albanese announced the government would be making changes to the planned stage three tax cuts.
Camera IconAnthony Albanese announced the government would be making changes to the planned stage three tax cuts. Credit: Chris Hyde/Getty Images

The average Bunbury resident can expect to be $600 better off after the Federal Government’s decision to backflip on an election promise to leave stage three tax cuts untouched.

According to data from the 2021 Census more than 63 per cent of Bunbury residents aged over 15 will benefit from the tax cut reforms.

Data shows that only around five per cent of people in Bunbury earn over the $150,000, the benchmark to be worse off from the reforms while 32 per cent are under the tax paying threshold and won’t be affected.

The changes are a broken election promise by the Albanese Government who vowed to keep the cuts in their original form as legislated in 2019.

The reform will benefit low and middle income workers but slash the amount saved for high income earners by up to $4,500.

Dollars earned between $18,201 and $45,000 will now be taxed at 16 per cent rather than 19.

The reform splits the next bracket into two with a 30 per cent tax rate between $45,001 and $135,000 and 37 per cent up to $190,000.

The original change was to make $45,001 to $200,000 one bracket taxed at 30 per cent.

A 45 per cent tax rate will remain for the top bracket but the threshold will move from $200,001 to $190,001.

Talking at the National Press Club, Prime Minister Anthony Albanese said the decision was an important one.

“If we were to simply proceed with the old plan, promoted before these challenges even existed, it would mean middle Australia missing out on the help that they need and the help that they deserve,” he said.

“For me our responsibility is clear, this is the right decision, not the easy decision.”

Mr Albanese confirmed the week prior that his Government was committed to the originally planned tax cut.

The day before the official announcement the Prime Minster was on the radio where he said “everyone will be getting a tax cut.”

It is unclear what the fallout will be from the decision as financial pressures put more pressure on households.

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