Q: What is the Labor Party’s position on the tax changes the Government announced in the Budget?
A: Labor leader Bill Shorten said in his Budget-in-Reply speech that Labor would not support the changes to personal income tax rates that the Government has proposed to take effect in 2024/25.
These changes would reduce the number of marginal tax rates to three: 19 per cent for income between $18,200 and $45,000; 30 per cent for income between $45,000 and $200,000; and 45 per cent for incomes over $200,000.
Labor does support the Low and Middle Income Tax Offset (LMITO) proposed in the Budget, which is planned to go ahead on July 1.
Offsets available under LMITO depend on the amount of taxable income, up to a maximum of $1080 where taxable income is between $48,000 and $90,000.
However, Labor says it will increase the offset for people with taxable income below $48,000.
Labor does not oppose the changes to personal income tax rate thresholds that take effect this year. For income earned in the year to 30 June 2018, the 32.5 per cent rate applied to taxable income between $37,001 and $87,000, and the 37 per cent rate applied to income between $87,001 and $180,000.
For income earned in the year to 30 June 2019, the 32.5 per cent rate applies to income between $37,001 and $90,000, and the 37 per cent rate applies to income between $90,001 and $180,000.
Labor has also confirmed that it will maintain the legislated company tax rate cut to 25 per cent by 2021/22 for businesses with annual turnover up to $50 million.