Australian Prime Minister Anthony Albanese has unveiled comprehensive changes to stage three tax cuts, aiming to provide “broader and better” outcomes for all taxpayers while specifically targeting cost-of-living relief for low and middle-income earners.
The adjustments include reducing the lowest income tax rate from 19% to 16% and the second lowest from 32.5% to 30%, alongside increases in the Medicare levy threshold and the top 45% tax threshold.
Albanese, addressing the National Press Club in Canberra, emphasised that these changes would alleviate living costs and enhance workforce participation, benefiting all 13.6 million taxpayers.
Below is a summary of the proposed new Stage 3 Tax Cuts:
Earn up to $18,200 – pay no tax
Pay a 16 per cent tax rate on each dollar earned between $18,201 – $45,000
Pay a 30 per cent tax rate on each dollar earned between $45,001 – $135,000
Pay a 37 per cent tax rate on each dollar earned between $135,001 – $190,000
Pay a 45 per cent tax rate on each dollar earned above $190,000
The plan encompasses a variety of alterations affecting each income tax bracket, with a focus on benefiting workers earning less than $45,000 and incentivising parents to return to work.
Albanese asserted that a worker with an average wage of $73,000 would receive a tax cut of over $1,500, doubling the original plan, and a higher-income earner on $190,000 would receive a $4,500 tax cut.
Under the original plan, the 30 per cent tax bracket, would apply all income earned between $45,001 to $200,000, benefiting a taxpayer on $200,000 per annum by $9,075.
The Prime Minister justified the change to focusing on “middle Australia” in response to the COVID-19 pandemic, rising interest rates, and global events like the war in Ukraine.
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