The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

2 May 2013

Incorrect reports on income taxes

The Daily Telegraph, Adelaide Advertiser and news.com.au have today misled their readers with a thoroughly inaccurate claim about personal income tax.

The article asserts that 'Australians will pay the highest effective tax rates in almost a decade'.

This is wrong.

Even with the 0.5 per cent increase in the Medicare levy from 1 July 2014, an individual must be earning more than $1.2 million a year before they will be paying more personal income tax - and therefore a higher total tax rate - under Labor compared to the previous government.

The modest increase in the Medicare levy will flow on to lift the top marginal tax rate – faced by 1.2% of Australians – by half a percentage point.

At 47 cents in the dollar the top marginal tax rate will still remain lower than the 48.5 cents in the dollar that was in place for the vast bulk of the Howard Government.

It is disappointing that these media outlets have elected to misinform their readers in this way.

Even after this modest increase to the Medicare levy and the flow on to the top marginal tax rate, the personal income tax burden on virtually all Australians is less than what it would have been in 2007.

The former Coalition Government was the highest taxing in our nation's history, with the tax to GDP ratio soaring to 24.2 per cent in 2004-05 and 2005-06.

By announcing a modest increase in the Medicare levy yesterday, the government is asking Australians to pay a little bit more so a whole lot more can be done for the 410,000 Australians with a severe and permanent disability.

Below is a table of tax cuts delivered under Labor since 2007.

Income Increase in ML Tax cuts since 2007
30,000 150 1,053
40,000 200 2,103
50,000 250 2,053
60,000 300 1,653
70,000 350 1,303
80,000 400 1,553
90,000 450 1,853
100,000 500 2,153
120,000 600 2,753
150,000 750 3,653
180,000 900 6,053
200,000 1,000 6,053