Here are some of the measures that have come out of the Budget and how they impact individuals.
Low and middle-income earners – tax cuts
- Bringing forward personal income tax cuts that have already been legislated for. Such cuts are a substitute for wage increases. The tax reduction increases the available cash in the hand of the household.
- This tax cut is a deduction against tax payable reducing the tax that is payable. It is available only to those that have taxable income and file tax returns and will not be refundable.
- With the filing of the 2018-19 tax return, single income families earning up to $126,000 will receive an immediate tax reduction of $1,080. For dual income families, this reduction will be $2,080. These cuts immediately increase available cash to the household. Over 4.5m personal taxpayers will enjoy the full benefit and another 5.5m will enjoy a progressively lower benefit.
- From 1 July 2024, for those earning between $45,000 – $200,000, the tax rate of 32.5% is reduced to 30%. This will mean that from that date, 94% of personal taxpayers will be on a tax rate of no more than 30%.
- From 2023-24 there will be four tax rates for all personal taxpayers:
Taxable income | Tax rate |
Up to $18,200 | Nil |
$18,201 – $45,000 | 19% |
$45,001 – $200,000 | 30% |
$200,001 + | 45% |
- By 2024-25, 60% of all personal income tax will be paid by the top 20% of taxpayers.
Tables:
The effect of these changes are shown in the tables below taken from the Budget papers.
Table A: Tax break
Dual income couple, equal income split ($)
Taxable income
Spouse1 |
Taxable income
Spouse2 |
Household taxable income | Current tax liability | 2018-19 tax relief | 2022-23 tax relief | 2024-25 tax relief |
30,000 | 30,000 | 60,000 | 4,794 | 510 | 510 | 510 |
60,000 | 60,000 | 120,000 | 24,294 | 2,160 | 2,160 | 2,910 |
90,000 | 90,000 | 180,000 | 45,464 | 2,430 | 2,430 | 4,680 |
120,000 | 120,000 | 240,000 | 68,864 | 630 | 5,130 | 8,880 |
200,000 | 200,000 | 400,000 | 134,464 | 270 | 5,130 | 23,280 |
Single person household ($)
Taxable income | Current tax liability | 2018-19 tax relief | 2022-23 tax relief | 2024-25 tax relief |
30,000 | 2,397 | 255 | 255 | 255 |
60,000 | 12,147 | 1,080 | 1,080 | 1,455 |
90,000 | 22,732 | 1,215 | 1,215 | 2,340 |
120,000 | 34,432 | 315 | 2,565 | 4,440 |
200,000 | 67,232 | 135 | 2,565 | 11,640 |
Table B: Tax rates from 2024/2025
Income tax rates by income range ($)
Rate | Current | From 2024-25 | New thresholds
in 2024-25 |
Tax free | 0 – 18,200 | Tax free | Up to $18,200 |
19.0% | 18,201 – 37,000 | 19.0% | 18,201 – 45,000 |
32.5% | 37,001 – 87,000 | 30.0% | 45,001 – 200,000 |
37.0% | 87,001 – 180,000 | – | – |
45.0% | > 180,000 | 45.0% | > 200,000 |
Income tax offsets ($per year, per person) | |||
Low income | Up to 445 | Up to 70 |
Table C: Proportion of taxpayers in each tax bracket, 2017-18
Source: Australian Financial Review, 3 April 2019
Energy Assistance Payment to pensioners and those receiving support payments
- Before 30 June 2019, a one-off cash payment may be offered to pensioners and those receiving support payments to assist with the payment of energy accounts. Payments are to be $75 for singles and $125 for couples.