Australia’s largest and most representative business network, the Australian Chamber of Commerce and Industry calls on the Parliament to pass the Government’s personal income tax package – the unlegislated components of stages 1, 2 and 3 – in full at the commencement of Parliament this week.
“The full tax package is a welcome reform that will make the tax system more robust and better suited to grow the economy by providing incentives to work and tackle tax bracket creep,” Jenny Lambert, Acting Australian Chamber CEO, said today
“The Grattan Institute report released today in our view overstates the benefit to higher income earners and the impact of the tax package on the progressiveness of the overall personal tax structure.
“The Grattan paper admits that the tax changes prevent bracket creep by lowering future marginal tax rates. It identifies that those in the middle of the income distribution will pay tax at a rate that is on average 1.5% less than they would under the current legislation. This compares to the top 15% of income earners, who will have an average tax rate 1% lower than today.
“As the report admits, by 2030, all taxpayers will be better off than if there were no changes to the tax rates in the coming decade.
“Taxpayers will retain more of their income under the new tax structure, even if their wages increase, either with inflation or movement to a new job.
“Often what analysis such as that released by Grattan today fails to highlight, is that the extra money in the hands of working Australians, arising from low tax rates, flows through the economy in many ways and has a positive impact on the job opportunities and wages of all Australians.
“Analysis from the Parliamentary Budget Office’s 2018-19 National Fiscal Outlook shows the Commonwealth’s underlying Budget position is becoming increasingly dependent on increases in personal income tax revenue, arising from wages growth and bracket creep.
“The tax cuts are necessary to constrain tax receipts as a share of GDP and keep the Government focused on spending taxpayers’ money efficiently and effectively.
“Even the Grattan Institute’s projections show that stages 1, 2 and 3 of the tax cuts are necessary to keep total receipts as a percentage of GDP over the next six years to 2025-26 around its 10-year average of 25% of GDP.
“We urge the Parliament to pass the package in full to put more money back into the pockets of Australians to stimulate consumer spending and investment.”
The Australian Chamber is Australia’s largest network of employers, speaking for over 300,000 businesses employing millions of Australians in every sector of the economy, in every corner of Australia. Our Small Business is a Big Deal campaign gives voice to what small businesses need from the federal government, and our Getting on with Business recommends ways to make Australia the best place in the world to do business, so that Australians have the jobs, living standards and opportunities to which they aspire.