Young people may be the biggest losers in the upcoming federal budget as the government avoids a firm answer on whether tax offsets will be extended.
Uncertainty surrounding the low-and middle-income tax offset (LMITA) is cause for concern among young people who are overwhelmingly represented in the lower tax brackets.
Treasurer Josh Frydenberg, has knocked back questions on whether the tax offset will be extended again in this year’s budget but has made clear that it was never a “permanent” solution.
The offset which doubled in last years budget and was due to expire in June, offered an offset of up to $1080 for Australians earning less than $126,000.
“That’s a lot of money, and there’s a lot of young people that are struggling to save up for a house, struggling to pay the rent and struggling with high petrol prices,” Dr Richard Denniss, Chief Economist at the Australia Institute told 7News.com.au
Dr Denniss expressed fears that younger Australians may be overlooked in the upcoming budget.
“Politicians of all stripes are good at saying that everyone is their priority”
“Come budget time, you can tell to the cent who their priorities are because it’s who gets the money and who doesn’t,” he said.
Shadow Treasurer, Jim Chalmers told ABC Insiders that the Labor Government has been consistently supportive of tax cuts for lower income earners and this is not about to change heading into the election.
“We’ve made it clear for some time that our preference for cost of living relief is that it be directed to those who need it most”.
Meanwhile, the Federal Government is moving towards the third phase of their plan to reshape the tax braxjmtzywcket system.
The plan is to widen the lower income bracket to allow people earning from $120,000 up to $200,000 to pay less tax.
When the government reaches stage three in the 2024-25 financial year, people in this bracket will get a tax cut of up to $9000 a year.
While people earning as low as $45,001 annually – overwhelmingly represented by young Australians – will wind up paying the same tax rate as those on four times their wage.
