The aged-based data breakdown reveals that Gen Z would receive only 2.8 per cent of the first year of the stage-three tax cuts in financial year 2024–25, and it would be older, high-income earners that benefit the most.
The stage-three tax cuts will cost the budget $244 billion over 10 years, and $17.7 billion in their first year, and in recent weeks have come under criticism from both sides of Parliament.
The stage-three tax cuts are the final phase of the Morrison government’s three-step plan to reform Australia’s tax system. Stages one and two included raising earning thresholds before the next marginal tax bracket kicked in, and a low and medium-income tax offset of up to $1,500 for people earning under $126,000. The offset (originally worth up to $1,080) was a temporary measure extended by the Morrison government to 2022.
The stage-three tax cuts abolish the 37 per cent marginal tax bracket, creating a flat tax rate of 32.5 per cent for anyone earning between $45,000 and $200,000. But it is Australia’s highest earners who will benefit the most, with people earning over $180,000 likely to see an almost $10,000 tax break, while someone on $45,000 would only see a $400 cut.
Despite Gen Z making up 12.7 per cent of taxpayers, the Australia Institute research found the under-25 years age group would receive less than 3 per cent of the tax cut benefits, with around 50 per cent going to people earning over $180,000 per year.
The Australia Institute’s summary of the stage-three tax cuts found that they will cost the budget around a quarter of a trillion dollars, and its tracking polls show that the more people learn about them, the more likely they are to support its repeal.
Its most recent poll, conducted between 4 and 7 October, found that support for repealing the stage-three cuts jumped 7 percentage points from the previous month.
Support for repealing the tax cuts now sits at 48 per cent, with those opposed to the move unchanged at 22 per cent. Those who were unsure or didn’t know about the tax cuts had fallen from 37 per cent to 30 per cent.
