Tax cuts or paying tax?

Oh so there is "outrage" over the "stage 3" tax cuts. Some people are going to get "more" and others will get "less" than they expected.

Except that nobody is actually going to be "better off".  Yes, that's right. Nobody is going to be better off.  

I certainly won't be. I don't earn enough to be better off. You see prices have risen well in excess of my income. The same is true for everyone I know. 

The government might be telling us that some people will be better off but in reality they are still going to be behind where they were several years ago. This is the result of "bracket creep", people moving from one level of taxation to the next.

But it is more than that. Anyone unfortunate enough to need multiple, expensive medication will be able to explain this. In 2023 the "safety-net", the point at which you start to pay a lower amount for some medications, was around $530. In 2024 it will be around $560. That $30 extra may not seem like much to many people but what it has done is ensure that you are not paying "less" for medication as the government recently tried to suggest. You will be paying more because the price of your medication has also risen. Overall it will have risen by more than $30 for the year.  

I had to work it out for an elderly person recently. He is on multiple medications - nothing unusual for a man of 94 - and he will reach the safety net. After that we worked out he will have to pay an extra $348 a year but the government has told him that "medicines are now cheaper".  

As we were watching the children in the street yesterday another neighbour told me, "We might get another $800 a year out of these tax cuts but the cost of running the car is going to increase by that much let alone the price of food...and don't start on the electricity bills! We are not going to be better off whatever spin the government puts on it." 

No, there are no tax cuts. We will still be paying more tax. We are one of the highest taxing countries in the world.  Our tax system is one of the most complex. We pay taxes at local, state and federal level - and don't forget the GST. We have a "Tax Act" that is so complex it is printed in more than one volume and nobody pretends to understand it in full. 

The only thing to come out of the announcement made yesterday is, if you listen carefully, "You will be paying at least the same amount of tax but we are trying to make it look as if we are giving some of it back."