Since the pandemic has begun, it has changed so many things, and when it comes to the economy, it has affected it very badly. People have lost their job and do not have much savings that they can use, and people even lose their houses. Now the government has given them some relief by cutting down the taxes to $1080 in the federal budget. It means that over ten million people from low and middle-income earners in Australia can enjoy this tax cut. But they may be forced to pay more tax in the next year.
It has been mentioned clearly that tax cut is not the permanent feature of the system, and it will be adjusted in next year’s budget. It means people who are earning an income between $45000 and $126000 will have to pay higher taxes next year. It has been known as the ”The Lamington” or the LMITO, which is the rebate that has been paid to them as a bonus. This system was going to expire this year, but because of the COVID situation, it has been extended for 2021-2022. It means when you will file the return in July next year, you will get the tax cut.
The decision has been made keeping in mind all the current situations that people are facing right now in the country. It is not a permanent feature. It is just a temporary feature because of the COVID situation; there is a cut in the people’s income. That is why the government has also given some relief to the people by cutting taxes for the lower and middle earners. The people with high income earning will have to follow the permanent feature that they are following for quite a long time.
It can be very beneficial for the people and if you want to know the benefits that people can experience are mentioned in the following points-
- The people, who are earning between $48000 and $9000, whether they are nurses, teachers, or tradie, will get the thousand dollars in their pocket at the end of the year, and this can be a big boost for their household income. They can use it in many ways, and it helps them so much.
- People with low income do not have to worry about that as they can enjoy the cut in the tax, whereas for the people with a high income, it will be the permanent one, so there will not be much problem.
- This system is designed just to stimulate the economy and also help the family because of that; they will get more money to spend.
But the problem arises because it has also been stated by the JIM Chalmers, the Labor’s treasury Spokesman that this system can run out after the election. It means that it is just a plan to get the people on their side in the election. And once the election is over, these tax cuts will run out.