Pay days for thousands of workers and small business operators on the Mid-North Coast are about to get better as tax cuts announced in the budget take effect from July 1.
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Tax reductions for people on incomes up to $48,000 will provide rebates of up to $530 rising progressively from around $200 for people earning $37,000.
Also on July 1, the threshold for paying 32.5 cents in the dollar will go up from $87,000 to $90,000.
Only those measures, in a more comprehensive plan to cut personal taxes, are so far certain.
Our intention that the 32.5 per cent rate applies only to incomes of $120,000 by 2022 needs approval by Parliament.
So does the plan that only those lucky few who earn $200,000 plus pay the top rate of 45 per cent from 2024.
The cumulative effect of the proposed reforms is by 2024 the top tax rate on incomes from $41,000 to $200,000 would be 32.5 per cent.
This would mean over 90 per cent of workers would pay no more. Some critics say the plan takes too long and costs too much.
The facts are tax relief for those most in need will be real from July 1. Higher earners would wait a bit longer.
And the cost is in fact a long term investment in workers, their families, their aspirations, and the economy.
The second element of our much wider plan to cut taxes and boost the economy is more encouragement for businesses to invest and create jobs.
From July 1, businesses with a turnover of up to $50 million will pay 27.5 per cent tax, down from 30 per cent.
The government wants corporate tax cuts to go on being phased in so by 2026-27 the highest rate for any business will be 25 per cent.
But as with the income tax plan only those cuts that come into effect next month are so far certain. The rest is in the hands of the Parliament.
The Coalition believes passage of the corporate tax plan is necessary if our companies are to go on investing and creating jobs at anything like the current record rate.
The problem is we now have one of the highest corporate tax rates in the developed world and that is a major disincentive to investment and job creation.
If we want bigger pay packets and more jobs for the Mid-North Coast, in a stronger economy, we need the Parliament to back all of the personal and corporate plan and not just the important elements that come into effect next month.
