2019-05-01 Money Australia

Both political parties are making big promises but

some workers will be much better off than others

A SURE THING
The good news is that both Labor and the
Coalition are prepared to splash cash to get
your vote. Both are offering an immediate
tax cut that can be claimed when you lodge
your tax return this year, though there are
bigger differences further down the track.

THE OFFSET OFFER
Both parties have promised to introduce
a new low- and middle-income tax offset
that can be claimed by anyone earning up
to $126,000 in this year’s tax return. This is
in addition to the existing low income tax
offset, which is only available to a smaller
group of taxpayers.
After being outbid by Labor when it
announced its original offset last year, the
Coalition has promised to lift its offset
from $200 to $255 for those earning less
than $48,000. It will then be phased up
to a maximum of $1080 (previously $530)
for those earning between $48,000 and

I get a tax cut

after the election

WHATW IF? Annette Sampson

H

aving a car accident is never fun. With

any luck, both parties have come out

of it physically unscathed but chances are

at least one person’s wallet will take a hit.

Just who will have to pay for the repairs

depends on who is at fault. In some cases –

for example, if you were hit from behind or

one of the drivers was drunk – it’s clear cut,

but in some instances both drivers might be

partly responsible. If the accident was not

your fault, then the other party should pay.

Ideally, you should have exchanged con-

tact details at the time of the accident. If the

other party has admitted liability and agreed

to pay for the damages, then you should get

two or three written quotes. The LawAccess

NSW website says that sometimes getting

more than one quote can help show that the

amount you are asking for is reasonable. The

other driver can then choose whether to pay

Accident isn’t your fault

THE CHALLENGE Maria Bekiaris

The other party should pay but it can get tricky

$90,000 and then phased down again so

that anyone earning more than $126,000

is ineligible.

Labor has agreed to match the maximum

offset but offered a $350 offset for those

earning less than $48,000.

Labor has also agreed to match the

Coalition’s plan to increase the top threshold

for the 37% tax bracket from $87,001 to

$90,001, which will deliver everyone earning

more than $87,000 a tax break as they will

be paying less tax on that extra income.

According to the government, this will

result in a tax cut of $135 for anyone earning

over $126,000. All up, it says someone on

$90,000 will receive a $1215 tax cut.

DOWN THE TRACK

However, the big differences emerge in the

longer-term view.

The Coalition has put forward a plan

for major tax reform that extends out to

2024-25 and succeeded in having this

THE COALITION’S TAX PLAN

RATE 2018-19 2022-23 2024-25

0% $0-$18,200 $0-$18,200 $0-$18,200

19% $18,201-

$37,000

$18,201-

$45,000

$18,201-

$45,000

30% – – $45,001-

$200,000

32.5% $37,001-

$90,000

$45,001-

$120,000

37% $90,001-

$180,000

$120,001-

$180,000

45% $180,001+ $180,001+ $200,001+

Low

income

offset

Up to $445 Up to $700 Up to $700

Low and

middle

offset

Up to

$1080

Source: Pitcher Partners