Today will be a quick update for the upcoming election and policies in response to the budget plans released last week. This election is becoming a battle for votes among salary earners.
In the past we have talked about class warfare strategy – it’s a tactic being used by both major parties.
- Where is each party is hanging their hats with incomes and taxes?
- Liberals announced tax cuts at the last budget last year
- Frydenberg’s affirming even more tax cuts for individuals and businesses, spending on education and infrastructure
- A reward for effort, aspiration, and enterprise, upholding personal responsibility and providing a helping hand where needed
- Next generation does not have to pick up the tab for the last generation
- Liberals are promising other things too like a budget surplus of $7.1bn which is a massive turnaround from 6 years ago when they took office
Tax original plan under Liberals:
- Provide immediate relief by increasing tax offset
- Protect income earners from bracket creep – wage growth with no threshold increase pushes people into higher tax brackets
- Abolishing an entire tax bracket – incentivising hard work
- Doubling the low and middle-income tax offset from 2018 – 19
- Structural reform by lowering the marginal tax rate to 30% for earners of $45k to $200k
- Limit the amount of tax as a share of the economy
- Being in surplus now means the government can reduce their revenue
- The previous episode explaining Reagan’s approach
- Someone earning $300k was paying 10 times more tax than someone no $45k
- What is Shorten’s response? Calling the budget radical right wing?
- Claiming tax reductions are the same as giveaways. A giveaway to let people keep what they work for?
- What is Shorten’s background and what he represents vs what he has?
- Morrison summed it up best – why would you work hard under the Labor government?
Labor’s budget plans:
- Alternative tax cuts and relief from bracket creep
- Said that 4.5 million workers earning between $48k and $90k will be better off under their plan, but are yet to release the details.
- ANU centre for social research has said under Labor there will be an increase in tax revenues of $39 bn over the years until 2024, which is a 5% increase from current revenues
- Analysts and professors say Labor’s plan will modestly lower income inequality but Liberal’s plan will modestly increase it because they pay more tax
- Let’s have a look at some statistics
- FT Employed – 6.7m and PT employed – 3.9m – about 10.6m people
- 5m people shorten referred to are mainly PT or entry working positions
- Median Income (middle) for full-time workers – $78,268 p.a.
- Average Income of FT worker – $90,300
- Average earnings of all workers (Pt and FT) – $67,243
What does this mean? The good side
- Simplified tax codes – this is a good thing
- Global confidence reaffirming the AAA rating
- Being on par with taxes in a global economy
What is bad?
- Other bits of regulations, you need less regulation in conjunction with lower taxes to benefit
- Abhorrent material on platforms tax
- Encryption laws to get around privacy breaches
- ISPs banning sites
- Some very good things here with tax cuts
- Tax cuts are good, especially when they benefit low-income taxes
- Income taxpayers fund the government, so its good to incentivise them to work
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