WA’s nurses, school teachers and police officers will face higher income taxes in five years if Labor wins the Federal Election, the Morrison Government has warned.
Treasurer Josh Frydenberg says anyone earning over $40,000 in WA will face a higher income tax bill in 2024-25 if the Coalition’s income tax plans never see the light of day.
He says WA’s mental health nurses (who currently earn between $57,500 and $64,070) will pay $493 to $678 more income tax in 2024-25 if Federal Labor wins the election because its tax cuts will not be as generous as the Coalition’s.
WA’s registered nurses (earning between $66,697 and $95,742) will pay $752 to $2907 more income tax in the 2024-25 financial year under Labor.
Senior registered nurses (earning between $108,085 and $164,220) will pay $4297 to $9344 more income tax in 2024-25.
WA’s public school teachers (earning between $66,697 and $95,742) will pay $752 to $2907 more income tax in 2024-25, while senior police constables (earning $92,882) will pay $2584 more.
“Anyone earning more than $40,000 will be better off under our plan,” Treasurer Josh Frydenberg said on Monday.
“It means school teachers, nurses, bus drivers and emergency service workers right across the country will have more money in their pocket.”
Economists caution it is difficult to make reliable comparisons of the household impact of the Coalition’s and Labor’s tax policies beyond four years because no one can say what shape the economy or wages growth will be in in 2024-25, which is two Federal elections away.
However, the Coalition hopes WA voters will look beyond to 2024-25 when it plans to flatten the income tax system by reducing the 32.5 per cent marginal tax rate to 30 per cent for taxable incomes between $45,000 and $200,000.
The Coalition says under that plan, 94 per cent of taxpayers will face a marginal tax rate of no higher than 30 per cent by 2024-25.
Labor is strongly opposed to that measure. It says the benefits of a flatter tax system would accrue to the wealthiest taxpayers.
Modelling from the Australian National University’s Centre for Research & Methods shows by 2024-25, the Coalition’s flatter tax system would increase income inequality slightly and create a “moderately less progressive tax system” compared to Labor’s tax plans.
However, Mr Frydenberg says the tax system will still be progressive under the Coalition’s changes because average tax rates will still increase for taxpayers as their income increases. He said average tax rates would be lower under the Coalition’s plan for all individuals earning over $40,000.
However, he conceded the average tax rate for individuals earning less than $40,000 would be higher under the Coalition’s plan.
“Our plan provides greater reward while ensuring top earners continue to pay their fair share,” Mr Frydenberg said.
The median income for an adult full-time worker in Australia is roughly $78,000, including income from all sources, before tax (which means 50 per cent of full-time workers earn more than $78,000 and 50 per cent earn less).
Data show 80 per cent of full-time workers earn less than $115,600 a year.
However, the median income for all workers combined – full-time, part-time and casual – is only $57,900 a year before tax. Data show 80 per cent of “all” workers earn less than $97,800 a year before tax.
Shadow treasurer Chris Bowen has said anyone earning $125,000 or less will receive equal or better tax cuts under Labor’s plan over the next three years.