Millions will win, millions will lose
ONE million Australian workers will avoid paying income tax under the Gillard government’s $15b welfare package to soften the blow of the carbon tax.
Announced on Sunday, the Federal Government unveiled the intricate details of the controversial tax which aims to reduce the nation’s carbon emission by 159 million tonnes a year by 2020 – the equivalent of 49 millioncars taken off the road.
Low income earners will avoid paying the tax and benefit from the tripling of the tax-free threshold while big money earners with incomes of more than $90,000 will bear the brunt of the scheme.
But Ms Gillard maintained that Australia as a whole would benefit, with an estimated nine in 10 households to be compensated.
“There’s no money tree, there’s no endeavour here to try and pretend that everybody is better off or everybody is in the same position,” Ms Gillard said.
By July 1 next year, people can earn up to $18,200 without being taxed, a level which will increase to $19,400 on July 1, 2015.
Two rounds of tax cuts will be for those who earn less than $80,000 a year and Queensland pensioners will receive an extra $338 a year if single, increasing up to $510 for couples.
But it is single people earning the big money whose pockets will be hit hardest because compensation rates under the scheme will not cancel out higher prices.
Singles earning more than $75,000 a year and couples with a combined income of more than $100,000 will be among the estimated three million households that will end up paying higher prices and only partial or no compensation received under the scheme.
It was the sticking point for Opposition leader Tony Abbott clung to when he predicted millions of families would be worse off.
“What is the point of all of this... if millions of Australians are going to be worse off, we are not actually going to cut our emissions,” he said.