The Turnbull Government’s legislation to provide personal income tax relief has passed the Parliament, confirming 500,000 average full-time wage earners will have more money in their pockets.
This tax relief presented at the Budget increases the middle income tax bracket from $80,000 to $87,000. This will prevent taxpayers moving onto the higher 37 per cent marginal tax rate.
By pushing out the tax threshold on the middle tax bracket we’ll keep average full time wage earners on the lower rate of 32.5 per cent for longer, providing tax relief of up to $315 per year.
This modest tax relief demonstrates that wherever possible the Turnbull Government will leave the money that Australians earn in their pockets.
This will reward and encourage hard working Australians for doing overtime, picking up extra shifts, earning a promotion or getting a higher paying job, instead of penalising them with a higher tax rate.
Individuals will get every dollar of their personal income tax relief backdated to 1 July 2016 and will already have started to receive the benefits with the lower tax rates applying from 1 October 2016.
These modest changes are also affordable, having been offset elsewhere in the Budget, not funded by higher deficits or higher borrowing.
Our outdated tax system is punishing hard work, hindering growth, limiting opportunity and hampering innovation.
A key challenge for any government is to ensure that as many people as possible are engaged in the economy and participating in work.
That’s why our incomes tax relief, as part of the Turnbull Government’s national economic plan for jobs and growth, will give hard working Australians greater incentive to earn more without being taxed more. Reducing the burden of tax will boost new investment, create and support jobs and increase real wages.