Australians’ personal income tax burden, already the highest in the world, rose faster than any other advanced economy last year, as bracket creep boosted record Commonwealth tax collections.
According to a fresh report published by the Organization for Economic Co-Operation and Development (OECD) on Thursday evening, a single, average wage-earner without children paid approximately $24,791 in personal income taxes last year — up 7.6 per cent on 2022 levels.
In comparison, Luxembourg, which recorded the second-largest increase in personal average tax rate rose by just five per cent.
Among the 21 OECD member countries, just four countries, including Australia, do not automatically adjust their tax brackets in line with the inflation rate to neuter the impact of wages growth.
The OECD report also cited the cessation of the low- and middle-income tax offset, which additional bolstered the income tax take.
Otherwise known as “the lamington”, the Morrison-era offset provided taxpayers with a lump-sum payment of up to $1080 after they had filed their annual tax return with the Australian Taxation Office.
The offset was extended at the Coalition’s final budget before the 2022 election and ultimately expired mid-2022 when Labor chose not to extend it.
The recent surge in income taxes, which jumped to a record $304.8bn last year according to separate analysis by the Australian Bureau of Statistics, has prompted the government to tweak personal income tax rates by offering more lucrative stage three tax cuts.
Responding to the figures, a spokesperson for Treasurer Jim Chalmers said the pending tax cuts were a better way to combat bracket creep than the previous settings legislated by the former Morrison government.
+ There are no comments
Add yours