There were key measures delivered in this week’s federal budget, impacting Australia’s workforce. Here, we’ve provided a quick run-down on what Scott Morrison has in store for workers….
- Tax refunds will increase for all Australians earning up to $125,000 year. But the most beneficial rebates sit with those earning between $48,000 and $90,000
- A single, lower-rate income tax of 32.5% will apply to workers earning between $41,000 and $200,000 a year. This expanded tax bracket means 94% of taxpayers will pay no more than 32.5 cents in the dollar in income tax compared with 63% today
- At least 4.4 million Australians will receive the maximum refund benefit of $530 (available to those earning between $48,000 and $90,000, as a lump sum on their tax return at the end of the financial year)
- The government is tackling what’s known as ‘bracket creep’ for worker’s future years – on the obvious proviso that future governments adhere to this plan
- Those earning up to $41,000 will pay the lower 19% income tax rate by 2023, raising the bracket from $37,000
- By 2023, higher income earners will also pay less tax: those earning up to $120,000 will pay 32.5% income tax.
- By 2024, the 37% tax bracket will be abolished entirely
As a resut, although workers earning up to $90,000 a year will be the first to benefit from the new tax measures, the gains will flow to wealthier households over time (this establishes a clash with Labor over whether to amend the reform bill in the Senate).
The goal, according to Morrison, is to flatten the tax system (and eliminate bracket creep) – meaning that where workers achieve an increase in salary, over time they wouldn’t be pushed into a higher tax bracket.
There are also measures proposed to entice older workers back into the work force. There’s a raft of pension sweeteners in the budget, including:
- Aged pensioners will be able to earn an extra $50 per fortnight without affecting their payments, offering financial security to older Australians security
- Up to $10,000 in wage subsidies will be provided to employers who take on staff aged over 50, with further incentives provided to upskill mature-aged workers
- Participation requirements for job seekers aged 30 to 49, and job seekers aged 55 to the Age Pension age will be strengthened, along with increased support to help them into employment