Former Labor prime minister Paul Keating slams top marginal tax rate of 45 per cent as ‘pathetic’

Australia’s ‘pathetically high’ income taxes are slammed – with workers here paying DOUBLE Singapore’s top rate

  • Australia has a top marginal tax rate of 45 per cent, level unchanged since 2006
  • It is more than double Singapore’s 22 per cent level for higher-income earners 
  • Former Labor prime minister Paul Keating said a 39 per cent rate was better 
  • He slashed top tax rate from 60 per cent to 47 per cent when he was treasurer 

A former Labor prime minister has slammed Australia’s high income tax rates with workers in Sydney paying a top rate that is double Singapore’s. 

Those earning more than $200,000 a year will continue paying a marginal rate of 45 per cent, even as the number of tax brackets is reduced from July 2024.

By comparison, Singapore’s highest income tax rate of 22 per cent doesn’t kick in until someone earns $320,000 in the local currency.

 

A former Labor prime minister has slammed Australia’s high income tax rates with workers in Sydney paying a top rate that is double Singapore’s (pictured is a woman at Sydney’s Opera Bar)

Former PM Paul Keating slammed how Australia’s top marginal rate had not been significantly reduced since 1990, when as treasurer he cut it from 60 per cent to 47 per cent over seven years.

‘It is still at 45 now 30 years later. I mean, how pathetic is that?,’ he told the ABC’s 7.30 program on Tuesday night.

‘The top marginal rate in Australia shouldn’t be a jot over 39 per cent.’

Even at that rate, Australia’s top tax bracket would still be higher than the United States’s 37 per cent level, which isn’t triggered until someone earns more than $US510,100.

It would also be significantly higher than New Zealand’s 33 per cent rate, which cuts in at $70,000 in Kiwi dollars. 

Mr Keating, who served as prime minister from 1991 to 1996 after successfully challenging Bob Hawke, slammed the Labor Party he once led for going to the last election with a plan to raise the top tax rate to 47 per cent. 

Former PM Paul Keating slammed how Australia's top marginal rate had not been significantly reduced since 1990, when as treasurer he cut it from 60 per cent to 47 per cent over seven years

Former PM Paul Keating slammed how Australia’s top marginal rate had not been significantly reduced since 1990, when as treasurer he cut it from 60 per cent to 47 per cent over seven years

‘If you’re talking about the Labor Party and why it lost the election, it failed to understand the middle-class economy that Bob Hawke and I created for Australia,’ he said. 

HOW MUCH ARE YOU GETTING BACK?

Those earning $48,000 to $90,000 will see their tax cuts double from $530 to $1,080. 

Part-time workers earning less than $37,000 a year are getting a smaller tax cut of $255, or just $4.90 a week.

Stage one increases the threshold for the 32.5 per cent personal income tax bracket from $87,000 to $90,000, over four years until 2022

Stage two, from July 1, 2022, will increase the 19 per cent personal income tax bracket from $41,000 to $45,000. It also raises the 32.5 per cent personal income tax bracket from $90,000 to $120,000

Stage three will see the 37 per cent tax bracket abolished from July 1, 2024 and a new 30 per cent tax bracket created for all individuals earning between $45,001 and $200,000. The number of tax brackets will be slashed from five to four for the first time since 1984

‘And so much of Labor Party’s policies were devoted to the bottom end of the workforce and the community, paid for by cuts in tax expenditures.’

As PM, Mr Keating didn’t cut Australia’s top marginal tax rate, despite being in power for more than four years after the last recession.

It was last reduced – from 47 per cent to 45 per cent – during John Howard’s fourth term as Liberal prime minister. 

From July 2024, those earning up to $200,000 will be paying a 30 per cent tax rate, as the number of tax brackets is slashed from five to four for the first time since 1984.

Those earning more than $200,000 will continue paying a top marginal rate of 45 per cent, keeping Australia in the same league as the United Kingdom. 

Prime Minister Scott Morrison’s Coalition government was elected for a third consecutive term after it promised to give tax relief to 10million workers earning up to $126,000.

This included $1,080 tax cuts for 4.5million people earning between $48,000 and $90,000.

By comparison, Singapore's highest income tax rate of 22 per cent doesn't kick in until someone earns $320,000 in the local currency

By comparison, Singapore’s highest income tax rate of 22 per cent doesn’t kick in until someone earns $320,000 in the local currency

Read more at DailyMail.co.uk