Third round of tax cuts now in operation

July 1, 2010

The third round of the Federal Government’s tax cuts come into operation today, July 1.

Member for Richmond Justine Elliot said that for a North Coast resident earning $50,000 a year, the tax cuts will mean an extra $450 in the pocket each year.

“On top of three income tax cuts in three years, families have received stimulus payments, a major boost to the aged pension and a historic paid parental scheme,” she said.

This was also in addition to further cost-of-living relief delivered through the Childcare Tax Rebate and the Education Tax Refund.

Compared with their income tax liability for 2007-08 (and excluding the Medicare levy), by 2010-11:

A person earning $20,000 will have received an income tax cut of around 56 per cent
A person earning $50,000 will have received an income tax cut of around 18 per cent
A person earning $80,000 will have received an income tax cut of around 8 per cent.

Also from 1 July 2010 the Low Income Tax Offset will increase for the third time in a row, from $1350 to $1500.

This means the effective tax-free threshold for taxpayers eligible for the full low-income tax offset will increase from $15,000 to $16,000.

Mrs Elliot said lifting the effective tax-free threshold for low-income workers will continue to provide more incentive to participate in the workforce, particularly for part-time and older workers.

Tax cuts will include lifting the 30 per cent marginal tax rate threshold from $35,001 to $37,001 and decreasing the 38 per cent marginal tax rate to 37 per cent.

The amount of income a senior Australian eligible for the Senior Australian Tax Offset can earn before they incur an income tax liability will increase from $28,867 to $29,867 for singles, and from $24,680 to $25,680 for each member of a couple.

Mrs Elliot said that all of these measures are part of the Government’s plan to strengthen Australia’s economy so it delivers for families.

Be Sociable, Share!