Australian Federal Budget 2020: What you will save from tax cuts - NEWS.com.au

These tax cuts were expected to begin in 2022 but have been fast-tracked to help with Australia’s COVID-19 recovery, with news.com.au previously reporting the cuts will also be backdated to this so workers don’t have to wait until the next financial year for tax relief.

This means if you earn $50,000 you will save $1080 under the fast-tracked tax cuts. People earning $90,000 will get $1215 back, while those that earn $120,000 or more will get $2565 back.

Australia has entered its first recession in almost 30 years and is currently battling a one-in-100-year global pandemic, making this Budget particularly crucial.

Some of the measures that have already been announced include:

Personal income tax cuts to be brought forward and backdated to this financial year
First Home Loan Deposit Scheme will be extended to help an extra 10,000 people
$1.2 billion for a 50 per cent wage subsidy of up to 100,000 new apprentices
$7.5 billion for major infrastructure projects
$1.5 billion for manufacturing in six key areas
Tax breaks for businesses with an aggregated annual turnover between $10 million and $50 million

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Stage 2 tax cuts are set to be brought forward as part of the Federal Budget and how much you save will depend on your yearly income.

These tax cuts were expected to begin in 2022 but have been fast-tracked to help with Australia's COVID-19 recovery, with news.com.au previously reporting the cuts will also be backdated to this so workers don't have to wait until the next financial year for tax relief.

This means if you earn $50,000 you will save $1080 under the fast-tracked tax cuts.

People earning $90,000 will get $1215 back, while those that earn $120,000 or more will get $2565 back.

Check out how much you will save in the chart below.

Greens Leader Adam Bandt has hit out at the proposed tax cuts set to be outlined in the Budget, saying more money shouldn't be handed to the "super wealthy'.

Mr Bandt said the focus should be on helping Australians who don't have jobs.

We should instead invest in a green recovery to tackle the climate crisis, create jobs and reduce inequality.
If we stop giving handouts to super-wealthy people like Clive Palmer, we can recover by building public housing, funding free childcare & getting to 100% renewables.
— Adam Bandt (@AdamBandt) October 5, 2020

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He added: "If there’s money to fund tax cuts for millionaires, then there’s money to lift JobSeeker and keep people out of poverty".

Shadow assistant treasurer, Andrew Leigh, also questioned the tax cuts, pointing out that higher income earners were less likely to put that saved money back into the economy.

"High income earners tend to save about a quarter of their income. So about a quarter of that doesn’t flow back into the economy," he told 2SM radio this morning.

"And the other thing is high income workers are very rarely on the margin between moving from welfare into work. So it’s difficult to imagine that if you offer a tax cut to somebody on $200,000, suddenly they’ll say ‘oh, well, I’ll take that $200,000 job rather than staying unemployed’.

"I would certainly benefit from a tax cut for people on $200,000, but that doesn’t mean that that’s good for the economy at a time when we’re borrowing every single dollar."

Labor Leader Anthony Albanese's decision to dub Australia's recent economic struggles the "Morrison recession" has been called out as "BS".

Mr Albanese has been using the term to describe Australia's economic state, calling on Prime Minister Scott Morrison to “accept responsibility for leading the government”.

But 2GB radio presenter Ben Fordham has lashed out at the Labor Leader, saying putting the blame on the PM is unfair.

"[Mr Albanese] is calling this the Morrison recession. Forget about the global pandemic. Forget about bushfires. Forget drought. He says the reason for our first downturn in 30 years is sitting in the prime minister's office," Fordham said on Tuesday morning.

“Albo, you’re better than that and the Australian people are too smart to buy the BS that you’re selling."

Picture: Sam Mooy/Getty Images

Mr Albanese defended his decision to call it the "Morrison recession", telling the ABC yesterday that the government was already heading towards economic strain before the pandemic hit.

“We entered this period from a position of weakness. Last year, wages were stagnant. The growth was below trend, consumer demand was low, productivity was going backwards, business investment was in decline,” he said.

“The government didn’t have a plan and was relying upon the Reserve Bank’s multiple decreases in interest rates to stimulate the economy. It is the government that said, of course, the budget was back in black. We know it wasn’t the case.”

Mr Albanese said Labor had been pushing for the government to introduce economic COVID-19 support long before they were brought in.

“We, of course, were arguing, early on for issues like wage subsidies when the Prime Minister was dismissing them,” he said.

“We were arguing for a cautious approach on borders when the Prime Minister was saying it was OK for people to come into Australia without so much as a temperature test, when they arrived at Sydney and Melbourne International Airports.”

Treasurer Josh Frydenberg has given further insight into what tonight's Federal Budget will look like, revealing it is "all about jobs".

"COVID-19 is an economic shock like no other. Globally, the equivalent of 600 million people have lost their job, and here in Australia, 10 per cent of our work force either lost their job or saw their working hours reduced to zero," he told reporters on Tuesday morning.

"The Morrison Government responded with an unprecedented amount of support. JobKeeper. JobSeeker. $750 payments to millions of pensioners, carers and others on income support. And a $32 billion cash flow boost that is supporting small business through this crisis."

#BREAKING: Treasurer Josh Frydenberg says he has a plan and that plan will be focused on jobs for Australians. @jekearsley #9News pic.twitter.com/R4HMjQ9ETH
— 9News Australia (@9NewsAUS) October 5, 2020

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Mr Frydenberg said the Budget will lay out the plan for Australia's economic recovery.

"Our plan will create jobs. This is all about jobs. It's all about helping those who are out of a job get into a job," he said.

"It's all about helping those that are in work stay in work. Our plan will create opportunity. Our plan will drive investment. Our plan will grow the economy and guarantee the essential services Australians rely on. Our plan will see Australia a stronger nation."

Mr Frydenberg said there have already been some "encouraging signs" for Australia's economy with COVID-19 restrictions being eased across the country.

"Right now we have a two-speed national economy. We have Victoria and we have the rest," he said.

"But, fortunately in Victoria, the number of daily cases has been coming down, and those restrictions have started to ease.

"And that will see more people in Victoria get back to work just as we've seen more people around the rest of the country get back to work."

The Morrison Government is set to deliver one of the most important budgets since World War II today.

It’s expected to include a staggering amount of spending and the biggest deficit in Australia’s history as the government tries to kickstart the economy amid the coronavirus pandemic.

But even with such a large amount of spending, not everyone will be a winner, here’s what we know about the Budget so far.

WINNERS

– Taxpayers: Anyone paying tax is set to receive some money back in their pockets although the largest amounts will likely go to those earning more than $90,000.

These were originally scheduled for 2022 but will now be delivered straight away, backdated to this financial year and 'turbocharged' for the rest for 2020.

– First home buyers: The First Home Loan Deposit Scheme will be extended to help an extra 10,000 people and the value of properties eligible will also be increased.

– Tradies: The Budget will include $1.2 billion for a 50 per cent wage subsidy for up to 100,000 new apprentices.

– Road and rail users: The government will fast-track $7.5 billion for major infrastructure projects.

– Manufacturing: There will be an extra $1.5 billion for manufacturing in six key areas, including resources technology and critical minerals processing, food and beverage manufacturing, medical products, clean energy and recycling, defence industry and the space industry.

– Small businesses: Businesses with an aggregated annual turnover between $10 million and $50 million will get access to tax breaks including on fringe benefits tax and simplified regulations.

LOSERS

– Anyone not paying tax: If you are one of those Australians who earn less than $20,000 and don’t have to pay tax then there doesn’t look like there will be much in the Budget for you.

– Big business: There’s no sign of any company tax cuts on the horizon, although the government is ploughing billions into funding infrastructure and manufacturing.

– Those relying on social housing: So far there’s been no indication the Morrison Government is planning a significant boost to social housing despite calls from Labor and support from the CFMEU, Master Builders Association, Housing Industry Association and the Property Council.

– Superannuation: Those hoping for changes to the superannuation guarantee look set to be disappointed. It doesn’t seem like Treasurer Josh Frydenberg is planning to stop the scheduled increases from going ahead.

The current plan sees people’s super gradually increase from 9.5 per cent to 12 per cent starting on July 1, 2021. There would be 0.5 percentage point increases over four years to July 2025.

READ MORE: Winners and losers revealed

Workers will secure a Christmas tax cut in Tuesday’s budget worth around $30-a-week on average in a surprise move designed to help beat the COVID-19 recession.

News.com.au can reveal that the $1080 personal income tax cuts originally scheduled for 2022 will not only be backdated to this financial year but ‘turbocharged’ for the rest of the year to catch up on the missing weeks since July 1.

As soon as the Labor Party confirms it will vote for the fast-tracked tax cuts in parliament, the ATO will be advised to start working on the rollout which should be in workers’ pockets by December.

But despite speculation the Morrison Government might bring forward the more controversial ‘Stage 3’ tax cuts, it’s understood these will remain on the original 2024 time frame and not be fast-tracked.

The tax relief for the rich worth up to $11,000-a-year from 2024 will not be brought forward ensuring the rich have to wait for whopping tax cuts.

– Samantha Maiden