The planned income tax cuts aim to put more money in people’s pockets.
The planned income tax cuts aim to put more money in people’s pockets.

Income tax cuts may come early

Working Australians could get more money in their pockets as the Federal Government considers bringing forward income tax cuts.

Treasurer Josh Frydenberg this week confirmed the Government was looking at the timing of the staged cuts as part of its economic recovery from COVID-19.

The legislated changes scheduled for 2022 and 2024 will lead to one big tax bracket between $45,000 and $200,000.

People earning between those amounts will pay a marginal rate of no more than 30 cents in the dollar.

Finance Minister Mathias Cormann told Sky News the Government was looking for opportunities to maximise the strength of the recovery.

"Clearly we would be looking for opportunities to provide appropriate incentives through the tax system," Senator Cormann said.

"What specific form that will take will be a matter for the Budget and indeed Budget updates beyond that.

"Our instinct always is to keep taxes as low as possible."

 

Finance Minister Mathias Cormann says the Government’s ‘instinct’ is to keep taxes ‘as low as possible’. Picture: Tony McDonough
Finance Minister Mathias Cormann says the Government’s ‘instinct’ is to keep taxes ‘as low as possible’. Picture: Tony McDonough

 

Measures the Government announces will aim to put more money in people's pockets and boost consumption.

In 2022, the income tax cuts will increase the upper threshold for the 19 per cent marginal tax rate from $41,000 to $45,000.

In 2024, the 37 per cent tax rate will be reduced to 32.5 per cent for all incomes between $45,000 and $200,000 a year.

Senator Cormann rejected union calls to extend the JobKeeper wage subsidy for a further six months.

"JobKeeper and the enhanced JobSeeker arrangements in their current form are coming to an end at the end of September," he said.

"On the basis of assessed need there will be continued support moving forward."

 

Originally published as Income tax cuts may come early



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