NEWS PRIME MINISTER DEPUTY PRIME MINISTER AND TREASURER COMBINING TAX CUTS WITH SIGNIFICANT TAX REFORM The Gillard Government’s household assistance combines tax cuts to help household budgets with significant tax reform that will simplify the tax system and free over one million Australians from having to lodge a return. The reforms will create a more efficient tax system and strengthen our economy by improving incentives to work. From 1 July 2012, every taxpayer earning up to $80,000 a year will receive a tax cut, with most getting at least $300 annually. A second round of tax cuts will apply from 1 July 2015, increasing this annual saving for most taxpayers earning below $80,000 a year to at least $380. The tax-free threshold will be more than trebled, increasing from $6,000 to $18,200 from 1 July 2012, and to $19,400 from 1 July 2015. The changes will deliver a simpler, more transparent personal tax system in line with the Australia’s Future Tax System Review. Regular wage earners with incomes below the new tax-free threshold will not have any tax withheld from their wages by employers, which will mean higher takehome pay and better incentives to work. The changes will particularly benefit part-time workers and workers on low incomes, ensuring that they pay less tax. Rolling the Low Income Tax Offset into a higher tax free threshold means better interactions with the transfer system. It will also mean statutory tax rates are more in line with the effective tax rates people actually pay, making the tax system easier to understand and fairer. Under the new tax scales, every taxpayer below $80,000 gets a tax cut, and no Australian taxpayer will pay a cent more tax. The changes build on the measures introduced in the 2011-12 Budget to boost workforce participation. CANBERRA 10 JULY 2011 PRESS OFFICE (02) 6277 7744 TREASURER’S OFFICE (02) 6277 7340
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