SYDNEY – 29 April 2014 – Australians earning $80,000 or more will share in paying the deficit tax because the Federal Government is very serious in getting its finances back to black.
Treasurer Joe Hockey’s “sharing the pain’’ deficit levy is set to be in tiers so that Australians earning more will pay more.
Taxpayers in the 37c tax bracket — on incomes of $80,000 to $180,000 — are likely to pay an extra 1 per cent. Taxpayers earning more than $180,000 are likely to pay an extra 2 per cent.
Under the new deficit tax, taxpayers with taxable income of:
- $80,000 will pay an extra $800 a year or $15 a week,
- $150,000 will pay an extra $1,500 a year or $29 a week,
- $200,000 will pay an extra $4,000 a year or $77 a week,
- $400,000 will pay a whopping extra $8,000 a year or $154 more a week.
Since the debt tax is only temporary, it will only be imposed while the budget is in deficit. It is expected that the debt tax will only apply for four years, and that a “sunset clause” will provide for the termination of this debt tax after the 2017-2018 fiscal year.
Prime Minister Tony Abbott said that Australia has $123 billion in deficit. In a speech at the Sydney Institute last night, he said widespread spending cuts will be done by the government.
PM Abbott said that everyone will be involved in helping the government, including members of Parliament. He said that in four years’ time, the national debt would be $667 billion. That would mean $25,000 “for every Australian man, woman and child”.
“Raising Australia’s already high dependence on personal income tax will place an increased burden on workers and could weigh down an already sluggish economy,” Business Council of Australia Chief Executive Jennifer Westacott said.
“If we are serious about lifting our productivity and competitiveness, we should be lowering taxes, not increasing them.
“Temporary tax increases are no substitute for the reforms that are needed to bring spending back under control and put the budget onto a more sustainable footing.
“We’re spending more than we are earning and, if not corrected, this will only get worse as the population ages and the cost of health and aged care services becomes unaffordable,” Westacott further said.