Fri. May 31st, 2024

Australians will get an ‘effective pay rise’: Here’s how much to expect

Tyler Mitchell By Tyler Mitchell May30,2024
Many Australians will be looking forward to the stage three tax cuts due to take effect from 1 July but unlike previous payments, they won’t be delivered in a lump sum.
The reworked version of the cuts, which provide more money to those on low and middle incomes, were included in Tuesday night’s budget.
The tax cut will be worth around $1,929 a year to those earning $90,000.

But this money won’t be delivered as one payment, unlike the Low and Middle Income Income Tax Offset, which saw tax refunds increased by around $1000 in previous years.

A man in a suit and tie speaks while other parliamentarians sit behind him

Treasurer Jim Chalmers delivers the 2024/25 Budget statement in the House of Representatives at Parliament House in Canberra on Tuesday, May 14, 2024. Source: AAP / LUKAS COCH

Johnathan McMenamin, a senior economist at financial services company Barrenjoey, said the stage three tax cuts were different to previous cuts because taxpayers would see money in their pay packets on an ongoing basis.

“It’ll be a smaller amount — where you will see it every week or every month (whenever you receive your pay packet) as an effective pay rise from paying lower tax,” he said.

“For example, somebody on $60,000 a year will see a weekly lift in their take home pay of about $23. And somebody on $120,000 will see something like $52 per week.

“It’s more of a modest trend lift in people’s incomes, rather than a big lump sum payment.”

To calculate the effective rise in your pay packet, use our interactive or check the table below.

McMenamin said these tax cuts had been expected for years and should not impact inflation.
“[They] won’t affect how economists and policymakers think about the outlook for the Australian economy,” he said.

Other budget measures to help with cost of living pressures were also announced.

Table showing how much people will get back thanks to Stage 3 tax cuts

Stage 3 tax cuts and how they will impact people’s pay packets.

Help with electricity bills

From 1 July, all Australian households will receive , while around one million small businesses will receive $325.

Delivered in partnership with state governments, the previous energy bill relief payments were targeted to those on income support, seniors and family tax benefit holders, and delivered as a direct credit on power bills.

Rent assistance

The maximum rates of Commonwealth Rent Assistance will be lifted by an extra 10 per cent, which will see payments increase by around $70 a fortnight.

It comes after the government lifted the maximum amount of the rent assistance subsidy by 15 per cent last year. This supplement is provided to those on lower incomes.

Nuisance tariffs

Other changes such as the may also help cost of living.
Treasurer Jim Chalmers announced earlier this year that tariffs would be scrapped on nearly 500 consumer items including fridges and washing machines from 1 July.

This will reduce the import costs of these products and should make the items cheaper.

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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One thought on “Australians will get an ‘effective pay rise’: Here’s how much to expect”
  1. As an economist, I believe these ongoing tax cuts will indeed provide Australians with a steady increase in their take-home pay. It is a more sustainable approach compared to lump sum payments, ensuring a consistent boost in disposable income over time. This could positively impact consumer spending and contribute to economic growth.

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