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Personal Tax Cuts in Detail

The Government will provide personal tax cuts worth $21.7 billion over four years, increasing incentives to work and save, assisting low income earners and keeping Australia internationally competitive.

The Government will provide a further $2.5 billion over four years to boost superannuation savings by abolishing the superannuation surcharge, with effect from 1 July 2005.

From 1 July 2005:

the 17 per cent marginal tax rate will fall to 15 per cent
the 42 per cent threshold will be raised to $63,001
the 47 per cent threshold will be raised to $95,001

From 1 July 2006:

the 42 per cent threshold will be raised to $70,001
the 47 per cent threshold will be raised to $125,001

Senior Australians who are eligible for the Senior Australians Tax Offset (SATO) will now pay no tax on their annual income up to $21,968 for singles and for couples up to $36,494.

The Medicare levy threshold for senior Australians will be increased to ensure that they do not pay the Medicare levy until they begin to incur an income tax liability.

NEW TAX SCALE

IMPROVEMENTS IN DISPOSABLE INCOME FROM TAX CUTS, AND FROM CHANGES TO THE INCOME TESTS FOR FAMILY TAX BENEFITS AND ALLOWANCES,
IN 2005-06 AND 2006-07

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