10 May 2018: Australia’s highest income earners will be the major beneficiaries of the Turnbull Government’s proposed tax cuts, according to analysis by the University of Canberra’s National Centre for Social and Economic Modelling (NATSEM).
The Government unveiled in Tuesday’s Budget a seven-year tax plan aimed at lowering personal income tax for all working Australians.
- Read NATSEM’s analysis of budget measures including the multi-step tax reform, reverted Medicare levy increase and more
Low and middle-income earners are set to benefit immediately from the proposed changes, but high-income earners will be best off in the long run.
NATSEM’s analysis of the Budget’s tax and transfer changes shows that a two-parent family with both parents earning $100,000 and two school-aged children will be $1,022 better off in 2018/19 compared to 2017/18. This will increase to $4,280 by 2024–25.
In comparison, a single parent family earning $70,000 per year with two children will be $757 better off in 2018/19 and $3,486 better off by 2024–25, according to the modelling.
NATSEM Director Professor Robert Tanton said while most working Australians will receive some relief from the tax changes, younger workers and welfare recipients don’t stand to benefit at all.
“People, particularly students, earning low salaries due to working minimal hours and those drawing an income from government initiatives such as Newstart will barely be impacted by the tax changes,” Professor Tanton said. “The tax cuts are aimed at nine-to-five workers – people already paying tax.”
For the first time, NATSEM has made its modelling system STINMOD+ available to the public.
Using STINMOD+, people can see how the 2018 budget will affect them personally and create personalised policy impact estimates.
“This is complex modelling and includes Family Tax Benefit-A and Family Tax Benefit-B indexation, the tax changes, and any other minor changes in the 2018 Budget,” Professor Tanton said.
“It is the first time in Australia that this capability has been available online. Our modelling includes all aspects of the tax and transfer system and allows us to see the impact at a personalised level.”