Federal Treasurer Josh Frydenberg has announced income tax relief for low and middle-income earners in the Federal Budget 2019-20. Calculate how much money will you get as tax relief.
In his first Budget speech, Federal Treasurer Josh Frydenberg has handed down a pre-election budget for the Coalition government with a budget surplus of 7.1 billion dollars for 2019/20 and announced more tax relief for low and middle-income earners.
“As part of our plan for a stronger economy, we will provide tax relief to Australian taxpayers with immediate relief for low- and middle-income earners,” Minister Frydenberg told Parliament.
“The Government will provide additional tax relief to hard-working Australians by more than doubling the low and middle-income tax offset.
“Low- and middle-income earners will receive a benefit of up to $1,080 for low- and middle-income earners to support consumption growth and ease the cost of living pressures. That's up to $2,160 for a dual income family.
“Taxpayers will be able to access the offset after they lodge their end of year tax returns from 1 July 2019, which is in just 13 weeks' time,” he announced.
Immediate relief to low-and-middle-income earners
The tax relief of up to $1,080 for singles or up to $2,160 for dual income families will be available for 2018-19, 2019-20, 2020-21 and 2021-22 income years.
Individuals with taxable incomes up to $37,000 will have their tax reduced by up to $255.
This will increase incrementally for those earning between $37,000 and $48,000.
The maximum offset of $1,080 will be available to taxpayers with taxable incomes between $48,000 and $90,000.
The offset then gradually reduces to zero at a taxable income of $126,000.
The offset will be received as a lump sum on assessment after individuals lodge their tax returns.
“This will assist more than 10 million Australians, with around 4.5 million individuals receiving the full offset for the 2018-19 income year.
“The maximum offset of $1,080 is more than double the offset of $530 announced in the 2018-19 Budget. The base amount has also increased from $200 to $255 for those earning up to $37,000.
“This additional tax relief will reward hard-working Australians, support consumption growth and ease cost of living pressures for low- and middle‑income earners by putting more of their money back in their pockets to spend, save or invest,” the Treasurer said.
Tax relief will 'make a big difference to the Indian community'
Vinod Mishra, Associate Professor of Economics at Monash Business School at Monash University says the government’s announcement of tax relief will make a big difference to most Indians living in Australia as they are employed and receive a salary.
“Tonight’s tax relief will make a big difference to a majority of our community as most of the Indian migrants are into jobs,” Professor Mishra told SBS Hindi.
“Economic theory says any amount of disposable income increases one’s wellbeing. When consumption increases, people feel happy. $1080 for single-income family and $2160 for double income families will allow them to make that one-off big purchase once a year.
“Any tax relief is always welcome. This time they have doubled it from last year.
“It is because it is a pre-election budget and tax relief is a popular measure,” he adds.
But he warns that most of the taxpayers are aware that elections are just weeks away and this budget announcement by the Morrison government is ‘an attempt to get a favourable outcome’ for them.
“It is a populist budget. And the Government is hoping to see these announcements translate into votes,” he says.