The personal income tax cuts we’ve eagerly awaited for 1st July 2024 may be getting a makeover. The Federal Government, amid much speculation and buzz, has decided to tweak these legislated Stage 3 tax cuts. This shake-up means a broader group of Aussie taxpayers will see more cash in their pay packets from July.
In a nutshell, it’s a win for many but a slight letdown for others. The government’s redesign aims to spread the benefits to households that the cost of living pressures have most heavily impacted.
In short, everyone wins a prize, some a little less than they were a couple of weeks ago. But for around 11 million Aussies, the prize is a fair bit bigger.
These tax cuts aren’t signed, sealed and delivered just yet. The Government has some legwork to do to turn the proposal into a reality by 1 July 2024. To get the legislation across the line they need to rally the support of the independents and minor parties.
In the 2018-19 Budget, the Government dropped its plan to give our tax system a much-needed facelift to deal with ‘bracket creep’ (a sneaky little thing where tax rates lag behind wage growth, quietly nibbling away more of your hard-earned cash over time.)
The three stage plan started on 1 July 2018, took another step in 2020 and the grand finale, Stage 3 was set to hit the stage on 1 July 2024.
Each step was like a little nudge to make sure more of your paycheck stayed where it belongs – with you.
If you want to get into the nitty gritty of these tax cuts and changes, have a read of this article from The Treasury.
If you have any concerns about the impact of the proposed changes please get in touch.
Cheering you on!
Certified Financial Planner®, Director
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Financial Advisor Geelong.
Note: The information contained in this update has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs.
You should seek advice before making any decision regarding any information, strategies or products mentioned to consider whether that is appropriate to your own objectives, financial situation and needs.
Current as of 25 January 2024.