Stage 3 tax cuts divide accountants
CA ANZ members disagree on whether they will add to inflation and be good for the economy, a survey finds.
The government’s stage 3 tax cuts have divided accountants who disagree over how the changes have been designed and their effect on the economy, a survey from CA ANZ shows.
The accounting body’s survey, released last week, showed 52 per cent of members supported the revamped package while 48 per cent opposed the changes.
“While the changes to Stage 3 tax cuts have received lots of attention since they were announced, our members were split down the middle on whether those changes are a good or bad thing,” CEO Ainslie van Onselen said.
Prime Minister Anthony Albanese announced the modifications to the original cuts last month.
They would take effect from 1 July and would cut the lowest rate of income tax from 19 per cent to 16 per cent and the second rate from 32.5 per cent to 30 per cent, applying to income up to $135,000. The highest 45 per cent tax rate would also increase to $190,000.
Out of the CA ANZ members who supported the changes, 47 per cent viewed the pivot towards low and middle-income earners favourably and said the tax cuts were more equitable.
However, 45 per cent of members opposed the revised cuts because they believed they would be inflationary. This was despite Treasury and the RBA being satisfied that any inflationary pressures brought on by tax cut-induced spending would be offset by a predicted increase in labour supply.
The survey also found 47 per cent of members who opposed the changes said they failed to address bracket creep.
In a budget submission last month, CA ANZ called for a “national discussion about expenditure and tax reform”, including reducing the government’s overreliance on income taxes.
Simon Grant, CA ANZ advocacy group executive said: “The federal government has gained a lot of revenue from Australian taxpayers over many years because of bracket creep as Australia does not index income tax thresholds for the impact of inflation.”
Ms van Onselen called on the government to produce a plan for “substantive” tax reform that addressed member concerns about bracket creep.
“It’s no surprise that the experts who deal with these tax matters each and every day are calling for reform,” she said.
“The time for ongoing reviews is over. We’ve said it before, and we will keep saying it – we need a plan detailing how Australia will achieve tax reform.”
“CA ANZ will continue our advocacy on behalf of our more than 136,000 members with the Federal Government in the led up to the Federal Budget in May.”
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