Save
What the tax breaks in the budget actually mean for your savings
The government’s plans to flatten the tax brackets may not have the intended outcome for taxpayers and the economy, according to one tax expert.

What the tax breaks in the budget actually mean for your savings
The government’s plans to flatten the tax brackets may not have the intended outcome for taxpayers and the economy, according to one tax expert.

From 2024–25, the government has proposed just three marginal tax rates above the tax-free threshold: 19 per cent for those earning between $18,201 and $45,000; 30 per cent for incomes up to $200,000; and 45 per cent as the highest rate for incomes above $200,001.
While the government has already legislated to remove the 37 per cent tax bracket, the plan will see the current 32.5 per cent rate be pushed down to 30 per cent, and the top income threshold raised from $180,000 to $200,000.
Treasurer Josh Frydenberg said that the changes will mean 94 per cent of taxpayers will face a tax rate of 30 per cent or less.
Speaking to Nest Egg’s sister publication, Accountants Daily, the Tax Institute’s senior tax counsel, Professor Robert Deutsch, said that while at face value it would seem that someone on a $45,000 income would be paying the same rate of tax as a taxpayer on $200,000, it would in fact be about eight times less.
“If you look at the marginal rates and feed them into the calculation, on the Coalition’s projected tax rates, someone on $200,000 will pay almost eight times more in income tax than someone on $50,000.
“When someone on four times more income pays eight times more tax, you indeed have a progressive tax system.”
He added: “I quite like the simplicity of that and it makes it a bit more straightforward.
“What I do like about that is that it gives people a better incentive to earn more income up to that $200,000 level.
“Economists will argue whether that incentive is real or just perceived, but I think it is good thing that somebody earning $60,000 or $70,000 and gets a 10 per cent pay rise doesn’t slip into a higher tax bracket.”
BDO national tax director Lance Cunningham said that while the plan looked good upfront, it would be a considerably long time before taxpayers would enjoy the flatter tax rates, especially in the current political and economic climate.
“It’s not until 2024, so it’s a bit on the never never — if you wait long enough, you might get something out of this,” Mr Cunningham said.

Tax saving
How are Australians planning on spending their tax savings?
Essential bills, savings accounts, Christmas gifts and exchange-traded funds appear to be the big winners from the latest round of tax cuts, new research has revealed. ...Read more

Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more

Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more

Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more

Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more

Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more

Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more

Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more

Tax saving
How are Australians planning on spending their tax savings?
Essential bills, savings accounts, Christmas gifts and exchange-traded funds appear to be the big winners from the latest round of tax cuts, new research has revealed. ...Read more

Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more

Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more

Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more

Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more

Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more

Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more

Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more