As the days roll by, the facts and real impacts of the Governments income tax cuts plan become clearer despite the Treasurer obfuscating and hiding basic information about the costs of it
No wonder Scott Morrison refuses to release the year-by-year numbers on the cost of the plan, because towards the end of ten year period, the benefits for high income earners rise significantly and at tremendous cost to the Budget.
New independent analysis by the Grattan Institute shows that once the income tax package is fully implemented in 2028, $15 billion of the annual $25 billion cost of the plan will result from collecting less tax from the top 20% of income earners.
This is on top of analysis from ANU Professor Ben Phillips which shows that by 2027, around 60 per cent of the cuts go to the top 20 per cent of households.
Professor Phillips said:
"I think what it shows you quite clearly is most of the benefits [from the tax cuts] go to high-income families in the later years.
In line with Prof Phillips findings, the Australia Institute found that: the top 20% of income earners will get 62% of the benefit of the governments proposed income tax cuts, while the top 10% (very high-income earners) will get about 40%.
Australia Institute economist Matt Grudnoff said: while someone on $200,000 earns five times more than someone on $40,000, their tax cut will be 16 times higher.
NATSEMs analysis of the tax cuts states:
However this new tax system from 2024-25 is less progressive than the current system. It means higher income inequality - the rich get more of the tax cuts than the poor.
No wonder Malcolm Turnbull and Scott Morrison are so eager to hoodwink and rush this package and legislation through the Parliament, attempting to sign up Senators without giving them the benefit of all of the distributional and financial impact information.
Labor has successfully moved for the legislation to be referred to a Senate Economics Legislation Committee to properly explore the distributional and financial impacts of the package with Treasury and key stakeholders and economists.
