Cost of living bonus for all working people

Good news – the Albanese government’s new tax-cut plan will provide cost-of-living relief for Australian workers and their families.

Under the changes, all Australian workers will receive a cost-of-living bonus. For example, a worker on average annual earnings of $72,753 will get a $1,498 tax cut. That’s an extra $28 in their pocket each week.

At a time when household budgets are under extreme pressure, and people are worried about putting food on the table and paying bills, these changes will make a real difference to workers’ living standards.

Use our calculator to work out how much your cost-of-living bonus will be – all you need to know is how much you earn per year.

A welcome change that will deliver for all Australian workers and their families

Under the new changes, all workers will pay less tax than they do now.

This is a huge difference from Morrison’s tax plan, which – not only was going to give the biggest benefits to the top 10% of earners – left out entirely those workers doing it the toughest and delivered crumbs for the average working family: giving nothing to people earning under $45,000 a year.

In fact, under the new rebalanced tax-cut plan, everyone gets a bonus and 84% of workers will get a bigger tax cut, compared to Morrison’s plan.

A worker earning $72,753 per year (the average annual earnings in Australia), will be $804 better off, than under Morrison’s plan.

A minimum wage worker will get an extra $15 per week – under Morrison’s plan, this was going to be just 44 cents, a pittance in the cost-of-living crisis.

 Women are also winners under the redrafted plan, with 90% of women now receiving a bigger tax cut. In fact, under the old plan, for every $1 delivered to working women, $2 was going to go to men. The Albanese government’s new tax-cut plan ensures working women get a fairer slice.

Leaving no-one behind

Under the new cost-of-living bonus – due to kick in from 1 July 2024, once passed parliament – every worker will be better off. How much this cut is, will depend on what you earn.

A retail worker earning $45,000 per year will receive a tax cut of $804.

A nurse earning $80,000 per year will get a tax cut of $1,679.

A train driver earning around $100,000 per year will get a tax cut of $2,179.

A person earning the median income of $63,500 will get a tax cut of $1,498.

How much will your cost-of-living bonus be? Find out here.

A tax system that is good for the people, the economy and the country

Australia has what is called a progressive tax system, which means that the tax rate (ie. how much someone pays) increases as taxable income (ie. how much someone earns) increases.

A progressive tax system reduces the tax burden on the people who can least afford to pay and ensures they retain more of their earnings, while collecting it from those most able to pay and for whom the burden of tax will have the least impact. This ensures that there is sufficient revenue to pay for government goods, services and infrastructure available for all citizens.

In Australia (under the current tax system and remaining the same under the new plan), everyone pays no tax on the first $18,200 they earn per financial year. Above that, the amount of tax you pay depends on where your total earnings fall in the tax brackets.

The Albanese government’s new tax-cut plan will make make Australia’s tax system fairer by delivering a cost-of-living bonus for those who need it most.