Blokes are the biggest winners under income tax cuts Anthony Albanese will hand out next year, and the Greens claim the cost is set to blow a $313 billion black hole in the budget.
The reason is simple – the gender pay gap means that men tend to earn more – sometimes even when doing the same job as women, as they can negotiate higher salaries with management and also have less time out of the workforce to raise children.
Workers earning more than $180,000 a year will secure just over half of the total value of the tax cuts – $157 billion over the decade.
That means the top 3.6 per cent of workers who earn over $180,000 a year will get half of the total tax cuts being handed out.
The stage three cuts create a flat tax rate of 30 cents in the dollar for anyone earning between $40,000 and $200,000.
But the stunning cost of the tax cuts over a decade has been revealed after the independent Parliamentary Budget Office (PBO) forecast the cost of the tax cuts over the next ten years.
While the budget was silent on the impact of the tax cuts, Treasurer Jim Chalmers confirmed at a press conference that they were set to cost $69 billion over the next four years.
But the new PBO analysis reveals that cost will blow out to $313 billion over the decade, delivering millions of Australians a tax cut.
It’s who gets that tax cut, however, that is exercising the Greens.
Men will be the big winners, as a result of the simple fact that they earn more than women and as a result pay more tax.
According to the Greens, the stage three tax cuts will continue to “turbocharge inequality”, disproportionately rewarding men at close to double what women receive, with 65 per cent of the benefits flowing to men over the next decade.
“Labor’s keeping renters in crisis and people in poverty while giving $313 billion in tax cuts to the wealthy,’’ Greens leader Adam Bandt said.
“Instead of freezing rents or getting dental into Medicare, Labor’s giving tax cuts to politicians and billionaires.
“Labor’s stage three tax cuts for the wealthy are a massive black hole, sucking in money that should be spent on services for everyone.”
Prime Minister Anthony Albanese has been accused of leaving “wiggle room” over calls to repeal tax cuts for the rich that will deliver a worker on $200,000 a year a whopping $9000 tax cut.
But Mr Albanese has insisted that he “inherited” the Morrison government’s legislated tax cuts and that his government had not changed its mind on the 2024 timetable.
According to the Australia Institute, a registered nurse on $72,235 will get a tax cut of $681 under the changes while a politician, on a base salary of $211,250, will get a tax cut of $9075.
Scrapping the tax cuts would boost budget revenues because workers would still be paying more tax. Cuts would break an election promise.
The stage three tax cuts which take effect from July 1, 2024 involve:
• Removing the $120,000 to $180,000 tax bracket
• Increasing the top tax bracket threshold from $180,000 to $200,000
• Reducing the marginal tax rate faced by the $45,000 to $200,000 tax bracket from 32.5 per cent to 30 per cent