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'Without increasing taxes'

By Michael Knox - posted Monday, 8 April 2019

SOURCES: Budget Paper No.1: Budget Strategy and Outlook 2019-20 Statement 5, Expenses and Net Capital Investment; Morgans

In Figure 6 below, we see expenditure outlined in Budget Paper No.1: Budget Strategy and Outlook 2018-19 & 2019-20; Statement 5, Expenses and Net Capital Investment. We see the estimated increases in Australian government spending by sector. We calculate these as the increase in the Budget for 2019-2020 over the budgeted expenditure a year ago in the Budget for 2018-2019.

Figure 6: Estimates of Increases in Australian General Government Expenses by Function

SOURCES: Budget Paper No.1: Budget Strategy and Outlook 2018-19 & 2019-20 Statement 5, Expenses and Net Capital Investment; Morgans

What this Budget does

This Budget does so many things. As well as the return to surplus, it provides a twostep plan to deliver $158billion in personal income tax cuts. In addition to previous personal income tax cuts of $144 billion, this brings the total personal income tax cuts to $302 billion.

Tax payers earning up to $126,000 a year will receive a tax cut. For single income families, this is a tax cut of $1,080 per year. For families on a dual income, this is a tax cut of $2,160 per year. These reductions in taxes will flow after tax returns for the 2018/19 financial year are submitted.

The second change is the lowering of the 32.5% tax rate to 30% from 1 July 2024. This will cover all tax payers earning between $45,000 and $200,000 and will mean that 94% of tax payers will pay no more than 30c in the dollar.

Small business is supported by cutting the corporate tax rate of small companies to 25c in the dollar. There is an instant write-off for small investments up to $30,000.

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This article was first published by Morgans.

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