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Poll shows growing number of Australians want phase three tax cuts scrapped | tax


Public support for the third phase of tax cuts continues to fall, with polls showing growing support for scrapping the $243 billion plan.

The latest phase of the Morrison government’s tax reform is not due to come into effect until July 2024, but the economic downturn has increased pressure on the Labor government to decide whether it will keep the cuts.

The latest Australia Institute poll, conducted October 4-7, showed support for ending the third-stage cuts jumped 7% from the previous month.

A brief guide

The third stage is the reduction of taxes


What are the costs of tax cuts in the third stage?

The cuts total $243 billion over 10 years.

What would change?

When the third-stage tax cuts are enacted, the $120,000 to $180,000 tax bracket will be removed and the top tax bracket threshold will increase from $180,000 to $200,000.

The marginal tax rate for those earning between $45,000 and $200,000 will drop to 30%. That’s down from 32.5% for those earning between $45,000 and $120,000 and from 37% for those earning between $120,000 and $180,000.

When do they come into effect?

The cuts were signed into law in 2019 with Labor backing and are due to come into effect on July 1, 2024.

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Support for repealing the tax cuts now stands at 48%, while those who oppose the move without any changes are at 22%. Those who weren’t sure or didn’t know about the tax cut dropped from 37% to 30%.

Institute asked the same questions in September for what became a follow-up survey people’s views on the cuts when the government has an “honest conversation” with the public about the state of the budget.

This was stated by the executive director of the Australian Institute, Dr. Richard Dennis studies have shown that public opinion is evolving as people became better informed about the effects of the package.

“The Treasurer has a once-in-a-generation opportunity to spend a quarter of a trillion dollars on nation-building without going into debt,” he wrote in the Guardian on Thursday.

“If Jim Chalmers gets his public investments right, he will be able to boost growth, lower the cost of living and pay down the national debt faster than expected.”

The third phase of tax cuts is the final stage in the Morrison government’s three-phase plan to reform Australia’s tax system. The first and second phases involved raising the earnings thresholds before the next marginal tax takes effect, as well as a low- and middle-income tax offset of up to $1,500 for people earning less than $126,000. The compensation (originally worth up to $1,080) was a temporary measure extended by the Morrison government until 2022.

The third phase of tax cuts eliminates the 37 percent marginal tax bracket, creating a flat tax rate of 32.5 percent for those earning between $45,000 and $200,000. But in Australia, those earning more than $180,000 will benefit the most, likely to see a tax cut of almost $10,000, while those on $45,000 will see a cut of just $400.

The tax package was passed by Parliament with the reluctant support of Labour. Labour’s election platform did not include any changes to the third phase of tax cuts, and Treasurer Jim Chalmers has repeatedly said the government’s position has not changed.

At the same time, Chalmers was watching for “thunder clouds” gathering in the global economy, which he said no “responsible” government could ignore. The language of Chalmers outlining his first budget has also changed, with more emphasis placed on the “tough decisions” the government must take in the face of rising inflation and global uncertainty.

In his first public comment since The debate over tax cuts resumed last weekAnthony Albanese backed his treasurer and left open the prospect of changes to the tax cuts, citing an “increasingly uncertain global economic outlook”.

The opposition caught on about changing the language as one of the first opportunities to launch a political attack on the government after the election, arguing that Labor was setting the stage to break an election promise. Labor MPs are also divided on the issue about the violation of commitments that the party took on the election.

An Australia Institute poll last month found that most Australians valued sound economic management over the fulfillment of a campaign promise.


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