Bold Tax Cuts for Hardworking Australians in 2024-25!

Australians now have reason to rejoice!

The Albanese Labour Government has introduced tax-saving measures that will give hardworking Australians financial relief, and will address the current economic challenges. This tax cut plan is set to commence on July 1, 2024; and will introduce a fairer tax system, reducing the cost-of-living pressures faced by many Australians.

Here are the main points:

Recognising the economic realities of 2024, where Australians are feeling immense financial pressure, tax relief has been prioritised. The last financial year has seen the first budget surplus in 15 years, and these tax cuts are designed to benefit 13.6 million Australians. They will now be able to keep more of their hard-earned wages without adding to inflationary pressures.

Comparing Labour's plan to Scott Morrison's:

While Scott Morrison's tax plan was crafted five years ago, before the pandemic and global economic shifts, the Albanese Government's plan has been created in response to the changing circumstances. This new approach promises a more responsible and effective way to ensure that those facing the most pressure receive a substantial tax cut.

Key features of Albanese Labour Government's tax cuts:

Starting from July 1, 2024, the Albanese Labour Government's tax cuts include:

• Reducing the 19% tax rate to 16% (for incomes between $18,200 and $45,000).
• Reducing the 32.5% tax rate to 30% (for incomes between $45,000 and the new $135,000 threshold).
• Increasing the threshold for the 37% tax rate from $120,000 to $135,000.
• Increasing the threshold for the 45% tax rate from $180,000 to $190,000.

What is the impact of these changes?

As a result of these changes, all 13.6 million taxpayers will receive a tax cut, with 2.9 million more taxpayers benefiting compared to Morrison's plan. 11.5 million taxpayers, that represents a whopping 84% of taxpayers will now receive a larger tax cut, including 5.8 million women, which is 90% of women taxpayers.

Individual tax cut scenarios:

• A person on an average income of around $73,000 will get a tax cut of $1,504 – $804 more than under Morrison's plan.
• A person earning $40,000 will receive a tax cut of $654 – compared to nothing under Morrison's plan.
• A person earning $100,000 will get a tax cut of $2,179 – $804 more than under Morrison's plan.
• A person earning $200,000 will still get a tax cut, which will be $4,529.

Additional Measures:

As icing on the cake, the Albanese Government plans to increase the Medicare levy low-income thresholds for 2023-24, benefiting over a million Australians!

Here’s a snapshot of the proposed personal tax rates and thresholds for 2024-25

Stress-free days ahead!

The Albanese Labour Government's tax cuts, together with targeted cost-of-living relief initiatives, have been designed to address the financial challenges faced by Australians in a sensible manner. This forward-looking plan, with a net cost of $1.3 billion over the forward estimates, sets the stage for a stronger and more resilient economy.

Are you looking to study, work and settle down in Australia? These new measures by the Australian Government are sure to benefit you!

To know more about how you can fast-track your Australian future, you can get in touch with our experts at MWT Education Consultancy!