From the Newsroom

Local News

FOR THE DETAILED TAX CHANGES TABLE *The table provides stylised cameos based on the tax payable for an individual, excluding any transfer payments. The tax liability and tax relief are calculated only taking into account the basic tax scales, low income tax offset, low and middle income tax offset and the Medicare levy (with 2017–18 Medicare levy single low-income threshold). Actual outcomes for many individuals and households would differ. Image: Australian Government ‘tax facts’ sheet

Who receives tax relief in the Clarence Valley

In his budget media release, Page MP Kevin Hogan said the Australian Government was “providing an additional $17.8 billion in personal income tax relief for more than 11 million hard working Australians, putting more money in their pockets to spend in small businesses across the country and helping to create jobs”.

Prime Minister Scott Morrison said in his media release that bringing forward “stage two of our Personal Income Tax Plan by two years” will result in an “increase from $445 to $700” in the low income tax offset, as well as increasing “the top threshold of the 19 per cent tax bracket from $37,000 to $45,000; and [increasing] the top threshold of the 32.5 per cent tax bracket from $90,000 to $120,000”.

“In 2020‑21, low-and middle-income earners will receive a one-off additional benefit of up to $1,080 from the low and middle income tax offset (LMITO),” he said.

These changes will be backdated to July 1 this year.

The Independent breaks down and compares the valley’s data to ascertain who will benefit (or not) from the government’s COVID-19 Economic Recovery Plan.

The Australian Government’s ‘Labour Market Information Portal’ states there are “approximately 12,577,100 employed people in Australia (ABS trend data)” and that the “median weekly earnings are around $1,100 per week”.

Whereas, in the Clarence Valley the Australian Bureau of Statistics (ABS) states that the median weekly earnings are $477 (individual), $1,133 (family) and $910 (household – compared to the NSW-wide figures of $664, $1,780 and $1,486, respectively.

According to Clarence Valley Council’s economic profile page (maintained by demographers, .id the population experts), there were 16,344 workers (2016 Census) in the valley.

Of those workers, 3,869 (23.7 per cent) earned less than $500 per week; 10,456 (64 per cent) workers earned between $500 and $1,749; and, 1,751 (10.7 percent) workers earned $1,750 or more.

Using the government’s Labour market figures and the figures that the government and Member for Page have promoted, “more than 11 million”, or 87.4 per cent, of workers across the land will receive tax relief, either as a tax cut or a one-off additional benefit from the LMITO.

This means that 1,577,100 (or fewer) low income workers (22.3 per cent) will receive no financial benefit, which, percentage-wise, roughly concurs with the valley’s percentage – a high proportion of the 23.7 per cent of workers who earn less than $500 per week.

The government’s tax fact sheet only offers assessments for those who earn a taxable income of $30,000 or more, however, in general terms, the Independent has been advised by a tax accountant that people who earn up to $22,000 per annum (the tax threshold is $18,201) will pay no tax as a result of the LMITO.

The government estimates that “10.1 million individuals will be eligible for the offset in 2020–21”.

“The LMITO was due to be removed with the commencement of Stage 2, but the one-off additional benefit in 2020–21 will provide support to households and stimulus to the economy during the recovery [from the pandemic],” it’s tax fact sheet states.

Meanwhile, in the Clarence Valley, its low socio economic status reveals a different picture.

Part time workers make up 43.6 per cent of the workforce (7,123), compared to the regional NSW percentage of 39.5 percent.

Similarly, 23.7 per cent of the valley’s workforce earn $500 or less, compared to regional NSW’s 20.4 per cent.

The $500 to $1,749 band is virtually the same as regional NSW: 64 and 63.6 per cent respectively.

Workers who earn $1,750 or more constitute 10.7 per cent of the valley’s workforce, whereas 14.2 percent of workers earn that amount in regional NSW.

The government’s accelerated plan will provide an extra $255 this tax year for people whose taxable income falls within the $30k and $35k bands; $580 for those who earn $40k; and $1,080 for people in the bands from $50k to $90k.

People in the $100k and $110k bands will receive an extra $1,530 and $1,980, respectively; people in the bands $120k to $200k will be $2,430 better off.

These figures come with the following disclaimer: “The tax liability and tax relief are calculated only taking into account the basic tax scales, low income tax offset, low and middle income tax offset and the Medicare levy (with 2017–18 Medicare levy single low-income threshold).

“Actual outcomes for many individuals and households would differ.”

FOR THE LOW AND MIDDLE INCOME GRAPHIC
*Number of individuals receiving a benefit is defined as those receiving at least one dollar of the low income tax offset, the low and middle income tax offset or benefit from the threshold changes, when compared with 2017–18 tax settings. Image: Australian Government ‘tax facts’ sheet

 

X