How much Aussies will get from tax cuts
Early tax cuts implemented to assist in the economic recovery from the coronavirus pandemic are expected to be rolled out over the next week, with millions of Australians to receive a pay rise.
The federal government's tax cut fast forward that was announced in its October budget is anticipated to issue a tax relief for more than 11 million Australians.
Changes to the taxation system will mean the 19 per cent threshold will increase from $37,000 to $45,000, while the 32.5 per cent tax bracket will increase from $90,000 to $120,000.
Low income tax offsets have been increased from $445 to $700, and low to middle income earners will receive a one-off tax benefit of $1080 for the 2021 financial year.
For worker on a salary of $100,000, the tax cuts will result in an annual tax reduction of $915.
A person on a salary of $80,000 will be taxed $1080 less.
The economic rationale for tax cuts is to place more money back in the hands of workers, who will then use the funds for additional spending and inject more money into the economy.
Treasurer Josh Frydenberg has previously said the tax cuts will help businesses employ more workers, which could assist in generating hundreds of thousands of new jobs.
"It is estimated our tax relief package to reduce the personal income tax burden and encourage business investment will create around 100,000 jobs by the end of 2021‑22 and boost GDP by around $6 billion in 2020‑21 and $19 billion in 2021‑22," he said.
CommSec senior economist Ryan Felsman said tax cuts and increased welfare injections would likely boost spending ahead of the Christmas trading season.
"It is hoped that those armed with savings will be primed for some retail therapy in the lead-up to big online sales events later this month ahead of the all-important Christmas trading period," Mr Felsman said.
Originally published as How much Aussies will get from tax cuts