Labor tested the waters on changing stage three tax cuts
Two internal documents reveal the government contemplated changes to the tax cuts that begin in July.
Treasurer Jim Chalmers sought advice from his department on the impact of changing the contentious stage three tax cuts on the budget's bottom line, according to internal Treasury documents.
The government continues to say it has no plans to change the tax cuts, which begin in July. But there remains speculation about potential amendments, with the cuts potentially adding to inflation and largely benefiting high earners when lower income households are bearing the brunt of the cost-of-living crisis.
This is the third stage of the former Morrison government’s tax cuts, legislated in 2018, after the earlier two stages targeted low and middle-income earners. It will amend several income tax brackets, including removing the 37% bracket entirely. Any dollar earned from $45,000 to $200,000 will be subject to a 30% tax rate, returning more than $20 billion to taxpayers.
Capital Brief submitted a freedom of information request to the federal Treasury on 7 November seeking modelling, analysis, estimates or correspondence between the department and the government relating to the impact of amending stage three on tax receipts or the budget generally, in the 12 months to October 2023.
