Strangely I've never heard any real debate or explanation about the tax cuts. It seems a little odd given the noise about projected increasing costs of healthcare, ageing population etc.
But when you scratch beneath the surface, it gets weird.
From 2025, the tax cuts are massively skewed to benefit those on high incomes. I did these calculations showing annual wage, tax cut and the tax cut as a % of income:
$25,000 $200 saving 0.8% of income
$50,000 $540 saving 1.08% of income
$100,000 $1125 saving 1.13% income
$150,000 $3375 saving 2.25% income
$200,000 $7225 saving 3.61% income
Seems really unfair. A 3.61% saving to someone on a lower income would make a big difference whereas Mr/Ms $200k will probably use it to further rort the tax system through negative gearing a useless unproductive asset (i.e an investment property).
Some of the politicians who claim they supported the legislation to help working class families are nothing short of disgraceful.
Negative gearing needs to change now. It should be grandfathered though, the housing market will implode if you abolish it altogether.
Yeah agreed, particularly as many of those that are set to gain the most out of these tax cuts are already utilising this opening, along with generous superannuation concessions to minimise their liabilities. Governments should be about communities, not about assisting those in the Tooraks or Double Bays of our land, which is where the most benefit of these latest tax cuts will fall, rather than the residents of rural areas and outer suburbs that need the break.
I am not against people earning a decent income for their endeavour and labour, nor using the rules to obtain the best outcome for themselves, but those that are on the higher incomes are generally the ones making the decisions and rules that are framing the increasing disparity between the haves and have nots. The income gap between corporates and service employees has become obscene over the last three and a bit decades, whilst their tax liabilities have also fallen dramatically.
Oh look I agree. The problem with a housing market implosion is that it just doesn't affect the investors, sole home owners (many of whom are struggling,) will have the value of their properties wiped as well.