The Stage 3 tax cuts, which will essentially create a flat income tax system, have always been clearly biased towards high-income earners. For those earning over $200,000, the tax cuts represent a 4.5% cut compared to just 0.6% for someone on the median income of $60,000. But this week, the Parliamentary Budget Office has released costings that detail just how skewed the allocation of money is to the richest in our society.
As labour market and fiscal policy director, Greg Jericho notes in his Guardian Australia column, the PBO estimates that of the $243.5bn that the tax cuts will cost in their first 9 years, 48% will go to people earning over $180,000, and 77% will go to the richest 25%.
In the first year of operation, the richest 1% of income earners will get the same benefit from the tax cuts as will the poorest 65%.
Greg Jericho notes that in 2024-25, $12.7bn of the $17.7bn annual cost of the tax cuts that year will go to those earning above $120,000. That is almost the same amount expected to be spent on Jobseeker payments that year.
The Stage 3 cuts are designed to favour the wealthy and reduce the level of revenue which in turn will force cuts to spending and programs that assist the most vulnerable.
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