Budget outlines 7-year tax cut strategy
The Federal Government has sought to deliver a seven-year tax plan which will begin immediately with tax relief for low and middle income earners before ending in 2024-25 with abolition of the 37 per cent tax bracket.
The tax plan, outlined by the Federal Treasurer, Scott Morrison starts with what he said could be “responsibly afforded” - those earning up to $37,000 and paying 19 cents in the dollar will have their tax reduced by up to $200 on what they have paid in tax, while those earning more than $37,000 and paying 32.5 cents in the dollar will have their tax reduced by up to a maximum of $530 a year.
Step two of the Government’s plan will see the 37 cents in dollar threshold lifted to those earning $90,000 a year before being raised against in 2022-23 to $120,000.
Morrison said that n 2024-25 the Government would “simplify the personal tax system by abolishing the 37 per cent tax bracket entirely” meaning that Australians earning more than $41,000 would only pay 32.5 cents in the dollar all the way up to the top marginal tax rate threshold which would be adjusted to $200,000, to account for inflation and expected wage movements over the next seven years.
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