Plans to slash taxes for wealthy Australians will enrich inner-city areas at the expense of poorer regional and rural communities, fresh analysis reveals.
The Coalition’s controversial Stage 3 tax cuts, which were retained by Labor, will benefit more than a third of Australians living in inner Melbourne, Brisbane and Sydney – but far fewer living in the regional towns surrounding those big cities, new Anglicare Australia figures show.
The charity group, which published a report into the plan on Wednesday, compared ABS data on incomes by geographic area against eligibility for the tax cuts, which are legislated and come into force in July 2024.
The tax cut will cost the federal budget $254 billion within a decade, and Canberrans are set to benefit most – with 31.5 per cent of residents in the nation’s capital headed for a lucrative tax cut.
About 23 per cent of West Australians, 19 per cent of Victorians and 18.4 per cent of those in New South Wales will also reap the rewards.
In contrast, only 12.1 per cent of Tasmanians will have their taxes cut, while just 13.9 per cent of South Australians will benefit from the plan.
Regions to be hit hardest
But the picture is most stark when the figures are broken into regions within each state and territory, Anglicare said, with residents of major capitals to benefit compared to most regional and rural towns.
For example, just 8.8 per cent of residents in NSW’s mid-north coast – including Taree and Port Macquarie – will see their taxes cut, and only 9.3 per cent of those living across New England will receive a benefit.
But to the south, more than a third of residents of inner Sydney will see their tax bills slashed under the $5.7 billion-per-year cuts.
The picture is similar in Queensland, where almost one in four living within Brisbane’s inner city will benefit from the cuts compared to just one in 10 on the Darling Downs three hours west of the big smoke.
In Victoria – where 33 per cent of Melbourne’s inner-city residents stand to have their taxes cut – only 14.2 per cent of those living just two hours’ drive north in Ballarat will be so lucky.
The Stage 3 cuts, which will come into effect in July next year, will remove an entire tax bracket for incomes between $120,000 and $180,000 and slash taxes big time for those earning under $200,000.
Those earning less than $45,000 will see no benefit, while 78 per cent of the lost government revenue will flow to the top 20 per cent of earners.
Critics argue that because the vast majority of the benefit will flow to high-income earners, the cuts should be scrapped in favour of higher spending on social services and housing policies.
“If the Australian government can afford to redistribute a quarter of a trillion dollars in revenue to the country’s wealthiest regions, then it can surely afford to help those which have been hit the hardest by recent cost-of-living pressures,” Anglicare Australia said on Wednesday.
“Given diminishing public revenues and growing public expenditure needs, we cannot afford the cost of the next round of tax cuts.
“They will clearly benefit those who need the least support and entrench regional inequities for years to come.”
The Labor government has come under pressure to ditch the tax plan, but has thus far resisted those calls after promising not to repeal them before the last federal election.
Earlier analysis by the Australia Institute has shown Stage 3 will deliver the largest dollar benefits to chief executives at corporations, politicians, surgeons, financiers and lawyers.
By age, just 2.8 per cent of Australians born into Generation Z will benefit under Stage 3, compared to 40.5 per cent of Gen X Australians and 32 per cent of Millennials.
