How does this Saturday affect your tax?

While over 1 million people have already voted, the majority of us head to the polls this Saturday to decide our government for the next 3 years. If who’s offering what tax incentives is important, then we’ve made it easy for you by outlining the basics below:

The ALP are offering what it calls the ‘instant tax deduction’ which they propose will start in the 2027 financial year. Under this scheme, rather than having to save receipts and submit  a series of deductions for individual work-related expenses, taxpayers can instead claim a blanket $1,000 deduction against their taxable income.

For taxpayers with more than $1,000 in deductions, you will be able to continue making claims as you have in previous years.

The above idea isn’t new. It was first proposed in the Henry Review back in 2010, however back then it was completely ignored. This proposal also only affects taxpayers who earn employment income.

Under a Coalition government, it proposes to offer a ‘cost of living tax offset’ of up to $1,200 for low to middle income earners in the 2026 financial year. Anyone who earns up to $144,000 will benefit under this scheme.

This scheme is similar to the previously introduced (and now scrapped) offering in the 2022 financial year by the Morrison government. However, under the previous scheme the offset was between $675 and $1,500. So again not a new idea, however does apply to a broader range of taxpayers than the ALP’s scheme.

 

Author

Kim Jay