Australians have pocketed over $680 on average in tax cuts since July with most low and middle income earners securing a slice of $7 billion in tax relief.
Treasurer Josh Frydenberg is spruiking the tax cuts today confirming how much has been paid out since the tax cuts were brought forward and backdated to July 1.
However, because the COVID-19 boost to the tax cuts was only announced in October, some of the tax cuts have been held over until you file your 2020-21 tax return.
In total, this financial year’s tax cuts are worth $2745 on average for singles and $5490 for couples.
The first six months of the year in theory has delivered half that but it’s less because the tax cuts were backdated to July 1 but didn’t start appearing in your pay packet until November.
For singles, most have secured over $686 since July and couples have secured $1372.
The amount that was not paid in the first quarter before the tax cuts were announced will be delivered in your tax return, which is likely to pump billions more into the economy and workers’ bank accounts.
Australia’s incredible comeback from the dark early days of the COVID-19 lockdown is also underlined in the stunning claim that 85 per cent of those who lost their jobs or had their job hours reduced to zero have now secured work.
An estimated 1.3 million Australians either lost their jobs or were forced to sit out the closures without hours during the first lockdowns.
According to Mr Frydenberg the tax cuts are also expected to help create new jobs.
“2020 was a year like no other. Hardworking Australians from all walks of life, through no fault of their own, paid a heavy price as a result of COVID-19,’’ he said.
“As part of our Economic Recovery Plan the Morrison Government has delivered $7 billion in tax cuts to Australians in the second half of 2020, meaning they have more money in their pockets over this well-earned summer break.”
“The 2020-2021 Budget personal income tax cuts, coupled with the Government’s loss carry-back and immediate expensing incentives for business, will create around 100,000 jobs by the end of 2021-22.”
Last year, the Morrison Government announced it was bringing forward what’s known as the Stage 2 tax cuts – providing a one-off additional low and middle income tax offset (LMITO) for the 2020-21 income year.
As a result more than 11.5 million individuals are expected to receive a tax cut in 2020–21.
A state breakdown of tax cuts flowing to households from 1 July 2020 reveals the extra money in NSW workers’ pockets was worth $2.1 billion and benefited an estimated 2.42 million people.
Victorians secured $1.7 billion in tax cuts and Queensland pocketed $1.45 billion.
But the value of the tax cuts fell sharply in smaller states including with SA securing $490 million, Tasmania and the ACT securing $160 million and the Northern Territory $70 million.
Overseas Australians pocketed $20 million in tax cuts in the six months to January.