{"id":101118,"date":"2025-02-06T13:15:00","date_gmt":"2025-02-06T02:15:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=101118"},"modified":"2025-02-06T13:11:08","modified_gmt":"2025-02-06T02:11:08","slug":"new-tax-cut-proposal-could-save-australian-couples-thousands","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/new-tax-cut-proposal-could-save-australian-couples-thousands\/","title":{"rendered":"New Tax Cut Proposal Could Save Australian Couples Thousands"},"content":{"rendered":"\n

A new proposed tax cut<\/strong> could provide a financial boost for certain Australian couples<\/strong>, but experts argue it might further complicate an already struggling taxation system<\/strong>. The proposal, put forward by Pauline Hanson\u2019s One Nation<\/strong>, suggests that couples with children should be able to split their income evenly<\/strong> across their tax returns, potentially reducing their total tax bill.<\/p>\n\n\n\n

Supporters see it as a win for families<\/strong>, but critics warn it disproportionately benefits high-income earners<\/strong> and could discourage workforce participation, particularly among women. With Australia\u2019s tax system<\/a> long overdue for an overhaul, is this policy a step forward or a dangerous distraction<\/strong>?<\/p>\n\n\n\n

How the Proposed Tax Cut Works<\/h2>\n\n\n\n

Under One Nation\u2019s plan, a couple could split their total income<\/strong>, which would allow more of it to be taxed at lower rates. Jennifer Game<\/strong>, a One Nation candidate, claimed that a couple earning $120,000 and $30,000<\/strong> respectively would save $2,022<\/strong> by shifting to an even $75,000 each<\/strong>.<\/p>\n\n\n\n

In reality, due to changes in the 2023-24 tax brackets<\/strong>, the actual savings<\/strong> would be closer to $2,100<\/strong>. While that may sound like a good deal for affected couples, the broader implications of such a policy raise red flags among economists.<\/p>\n\n\n\n

Who Really Benefits?<\/h2>\n\n\n\n

Greg Jericho<\/strong>, chief economist at the Australia Institute<\/strong>, isn\u2019t convinced. \u201cI don’t think it has merit at all,\u201d he told 9News<\/strong>.<\/p>\n\n\n\n

\u201cThe main problem is it really just benefits high-income earners<\/strong>, and it also acts as a disincentive for mostly women<\/strong> to enter the workforce.\u201d<\/p>\n\n\n\n

His concern isn\u2019t new. Income splitting<\/strong> has been debated for years, often criticized for favoring single-income families<\/strong> while doing little to support dual-income households<\/strong> or lower earners. In short, it\u2019s a tax cut that works best for those already doing well<\/strong>.<\/p>\n\n\n\n

Australia\u2019s Tax System: Broken for over a Decade<\/h2>\n\n\n\n

Australia\u2019s taxation system<\/strong> has been in urgent need of reform<\/strong> for over 15 years<\/strong>. In 2009, former Treasury secretary Dr Ken Henry<\/strong> released a comprehensive tax review<\/strong>, proposing 138 recommendations<\/strong> for a modernized, fairer tax system.<\/p>\n\n\n\n

Almost none of them were implemented.<\/p>\n\n\n\n

“We’re in a worse position now than we were 15 years ago<\/strong>,” Henry told the ABC<\/strong> last year, calling it an intergenerational tragedy<\/strong>.<\/p>\n\n\n\n

Rather than cutting taxes in a way that favors the wealthy, experts argue that a serious rethink of tax structures<\/strong> is needed\u2014one that ensures big corporations<\/strong> and high-income individuals<\/strong> pay their fair share.<\/p>\n\n\n\n

The Real Tax Problem: Who Isn\u2019t Paying Enough?<\/h2>\n\n\n\n

Jericho argues that Australia\u2019s tax system relies too heavily on personal income tax<\/a><\/strong>, while businesses and the ultra-rich enjoy loopholes and exemptions<\/strong>. He points to areas like:<\/p>\n\n\n\n