Australia’s biggest income tax shake-up in decades just months away

The biggest shake-up to Australia’s income tax system in decades is now just months away. From July 1, Australians earning more than $45,000 a year will receive a tax cut, but tonight there are still arguments over the fairness of the plan. It is part of the last phase of a massive reform plan legislated by the former Morrison government and left unchanged by Labor, with stage three aimed at targeting so-called bracket creep. “It is so important at a time inflation in stealing from people’s pockets that some of that go back into Australians' pockets,” Shadow Treasurer Angus Taylor said. From July 1, the 37 per cent tax bracket will be abolished, with people earning $45,000 to $200,000 taxed at the same rate of 30 per cent. It is estimated it will cost the budget $308 billion over a decade. “It does mean a somewhat simpler tax system, but it also means that it does introduce a little bit more unfairness in the system,” ANU Centre of Social Research and Methods Ben Phillips said. People earning $200,000 will receive a tax cut of $9,075, $1,125 for people on $90,000, but no tax cut for people making under $45,000.