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Positive Budget outcomes for the average Australian worker are a must this year, and it’s not unlikely that they’ll come in the form of personal tax rate tweaks.
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Budget 2017: Small personal tax cuts on the table
05 May 2017
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4 minute read
The $36.5bn deficit predicted in the Mid-Year Economic and Fiscal Outlook means that the Government is unlikely to have much room to play with for Budget sweeteners this year.
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Nevertheless, the Treasurer will need to come up with something positive for the average worker.
So, don’t be surprised to see a small, but welcome, tweak to the personal tax rates and thresholds. This was the case last year when the 32.5 per cent personal tax threshold was increased from $80,000 to $87,000. That 2016 measure cost the Government $4bn, so don’t expect anything more than a token “sandwich and milkshake” tax cut in a non-election year.
The other personal income tax item to watch is the 2 per cent Budget deficit levy on incomes over $180,000. After 3 years of operation, this measure is due to cease on 30 June. While the Treasurer has previously stated that the Budget repair levy would not be extended, it is a tempting target to pay for a small tax cut for average workers.
This piece is brought to you by Thomson Reuters. To sign up to Thomson Reuters Federal Budget 2017 report, please click here.
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