The 2004-05 Budget provides cuts to personal income tax to the value of $14.7billion over four years and will ensure that more than 80 per cent of taxpayers will remain in or below the 30per cent tax bracket, even allowing for robust wages growth over the next four years.
The 2004-05 Budget tax cuts increase the rewards from working. They will be delivered by raising the income thresholds for the 42 and 47 per cent tax brackets.
-
The 42 per cent threshold will be raised from $52,001 to $58,001 from 1 July 2004 and raised again to $63,001 from 1 July 2005.
-
The 47 per cent threshold will be raised from $62,501 to $70,001 from 1 July 2004 and raised again to $80,001 from 1 July 2005.
Australians on incomes equivalent to fulltime adult average earnings would have crossed the existing 42 per cent threshold in 2004-05. Lifting the 42 per cent threshold will ensure that Australians on average earnings stay in the 30 per cent tax bracket and are insulated from the effects of bracket creep.
The 2004-05 Budget tax cuts will also ensure that Australia’s personal income tax system remains internationally competitive, ensuring that Australia can attract and retain people with highly regarded skills.
Reform of personal income tax in The New Tax System, tax cuts in the 2003-04 Budget and this latest round of tax cuts mean that all taxpayers have benefited from significant reductions in tax.