Treasurer Jim Chalmers has announced two more tax cuts for the lowest tier of income earners in Australia as the government gears up for the federal election in a few weeks.
Chalmers unveiled the surprise policy during his final budget for this term on March 25.
The first cut will come in 2026, which will reduce the tax rate for the lowest income bracket (between $18,201 to $45,000) from 16 percent to 15 percent.
In 2027, this will be reduced to a 14 percent.
For taxpayers this equates to a saving of around $43 per week in 2026, and $50 per week in 2027.
The cuts will come on top of the legislated Stage Three tax cuts by the government in July last year.
“Labor’s new tax cuts are modest but they will make a difference,” Chalmers said.
The treasurer said the new tax cuts will be phased in over two years, ensuring fiscal settings are consistent with inflation growth.
Non-Compete Clauses to be Abolished
Non-compete clauses will also be abolished, freeing up approximately 3 million workers including those in childcare, construction, and hairdressing.Workers may be required to sign non-compete agreements, meaning they must wait a certain period of time before they can move to a similar job, something the government says limits prosperity and drags down wages.
“Workers should not be handcuffed to their current job when there are better opportunities available for them,” Chalmers said.
“Treasury’s Competition Review heard troubling accounts about the misuse of non‑compete clauses, including minimum wage workers being sued by former employers and workers being threatened with legal action if they switched jobs.”
The ban on non‑compete clauses will apply to workers earning less than the high‑income threshold in the Fair Work Act (currently $175,000).
Other changes will be made to close loopholes allowing employers to fix wages by making anti‑competitive arrangements that cap pay and conditions without the knowledge of affected workers.
“No-poach” agreements allowing workplaces to stop staff being hired by competitors will also be cracked down on.
Opposition Opposes Tax Cuts, Criticises Spending
Shadow Treasurer Angus Taylor has already come out saying the federal Coalition would not back Labor’s tax cuts, which he has labelled an “election bribe.”“The Coalition will not support these tax changes that do nothing to address the collapse in living standards under Labor,” he said in a statement.
“Seventy cents a day, in a year’s time, is not going to help address the financial stress Australian families are currently under.”
Taylor also criticised Labor for lifting spending by a total of $425 billion, about $40,000 per household.
“Tonight’s Budget confirms there are deficits as far as the eye can see—and inflation is staying higher for longer under Labor,” he said.
“There are 41,000 new public servants under Labor in Canberra, at a time when services have not improved.”
