A new Treasurer and a focus on 'work, save, invest'
September 2015

Former Treasurer, Joe Hockey, previously said that personal tax cuts were required to prevent 'bracket creep' – that's jargon for what happens when the tax rate thresholds don't keep pace with the increase in earnings and more people are pushed into a higher tax bracket (they get taxed more and potentially lose access to benefits but are economically standing still).
So will the new Treasurer's reforms also include Mr Hockey's tax cuts?
What are the issues around bracket creep?
The last change to tax brackets occurred in 2012, when the tax-free threshold was raised to $18,200.
The Government estimates that in the next two years, more than 300,000 Australians will move into the second highest tax bracket and that by 2025, 43% of taxpayers will sit in the top two tax brackets.
The Treasurer also points out that in many cases, women returning to work after being on maternity leave are often worse off or no better off once the cost of childcare has been factored in. It's a big issue for many families and prevents women contributing in the workforce.
What are the solutions to bracket creep?
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Disclaimer
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
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