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'Without increasing taxes'

By Michael Knox - posted Monday, 8 April 2019


SOURCES: Budget Paper No.1: Budget Strategy and Outlook 2019-20 Statement 5, Expenses and Net Capital Investment; Morgans

In Figure 6 below, we see expenditure outlined in Budget Paper No.1: Budget Strategy and Outlook 2018-19 & 2019-20; Statement 5, Expenses and Net Capital Investment. We see the estimated increases in Australian government spending by sector. We calculate these as the increase in the Budget for 2019-2020 over the budgeted expenditure a year ago in the Budget for 2018-2019.

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Figure 6: Estimates of Increases in Australian General Government Expenses by Function

SOURCES: Budget Paper No.1: Budget Strategy and Outlook 2018-19 & 2019-20 Statement 5, Expenses and Net Capital Investment; Morgans

What this Budget does

This Budget does so many things. As well as the return to surplus, it provides a twostep plan to deliver $158billion in personal income tax cuts. In addition to previous personal income tax cuts of $144 billion, this brings the total personal income tax cuts to $302 billion.

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Tax payers earning up to $126,000 a year will receive a tax cut. For single income families, this is a tax cut of $1,080 per year. For families on a dual income, this is a tax cut of $2,160 per year. These reductions in taxes will flow after tax returns for the 2018/19 financial year are submitted.

The second change is the lowering of the 32.5% tax rate to 30% from 1 July 2024. This will cover all tax payers earning between $45,000 and $200,000 and will mean that 94% of tax payers will pay no more than 30c in the dollar.

Small business is supported by cutting the corporate tax rate of small companies to 25c in the dollar. There is an instant write-off for small investments up to $30,000.

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This article was first published by Morgans.

Disclaimer

The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual’s relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so. Those acting upon such information without advice do so entirely at their own risk.

This report was prepared as private communication to clients of Morgans and is not intended for public circulation, publication or for use by any third party. The contents of this report may not be reproduced in whole or in part without the prior written consent of Morgans. While this report is based on information from sources which Morgans believes are reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect Morgans judgement at this date and are subject to change. Morgans is under no obligation to provide revised assessments in the event of changed circumstances. This report does not constitute an offer or invitation to purchase any securities and should not be relied upon in connection with any contract or commitment whatsoever.



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About the Author

Michael Knox is Chief Economist and Director of Strategy at Morgans.

Other articles by this Author

All articles by Michael Knox

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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