The Government has announced that they intend to amend the Stage 3 cuts and will be introducing legislation into Parliament shortly to enact these changes. The new tax rates proposal involves the following proposed changes to be effective from 1 July, 2024:

• Reduction of the 19% tax rate to 16% (for incomes between $18,200 and $45,000)
• Reduction of the 32.5 percent tax rate to 30 percent (for incomes between $45,000 and the new $135,000 threshold)
• Increased the threshold at which the 37 percent tax rate applies from $120,000 to $135,000
• Increased the threshold at which the 45 percent tax rate applies from $180,000 to $190,000.

As a result of these changes, on July 1:

• All 13.6 million taxpayers will receive a tax cut – and 2.9 million more taxpayers will receive a tax cut compared to the previous plan.
• 11.5 million taxpayers (84 per cent of taxpayers) will now receive a bigger tax cut compared to Morrison’s plan.
• 5.8 million women (90 per cent of women taxpayers) will now receive a bigger tax cut compared to the previous plan.
• A person on an average income of around $73,000 will get a tax cut of $1,504 – that’s $804 more than they were going to receive under the previous plan.
• A person earning $40,000 will get a tax cut of $654 – compared to nothing under the previous plan.
• A person earning $100,000 will get a tax cut of $2,179 – $804 more than they would receive under the previous plan.
• A person earning $200,000 will still get a tax cut, which will be $4,529.

A more detailed breakdown on the changes can be seen in the table below.

It is worth noting that these changes are just proposed and will need to be legislated prior to July 2024 to take effect.