If, after two years of sustained cost-of-living pressures, you’ve found yourself with a bit of extra cash each week and have been fastidiously squirrelling it away, please let me give you a round of applause for doing such a good job.
Chances are, this extra money is coming your way because of the stage 3 tax cuts that came into effect on July 1 of this year. If you earn $50,000 a year, it equates to roughly $17.87 extra each week ($929 per year), and if you’re earning $100,000, that figure goes up to an extra $41.90 each week ($2179 per year).
While all of us have benefited from the recent cuts to the tax rate, confused messaging from the government may have you wondering what to do with it.Credit: Dionne Gain
If you’re feeling slightly confused about whether you should be running out and spending this newfound bonus or tucking it away, though, you’re not alone. To figure out how the hell we got here, and what it is exactly you’re supposed to be doing, let’s go back in time.
When announced in January, Treasurer Jim Chalmers said the change to stage 3 tax cuts was a “way to provide more cost-of-living relief to more people”, explaining, “this is about middle Australia, it’s about helping people deal with these cost-of-living pressures”.
Listening to Chalmers at the time, you could be forgiven for thinking the government’s aim was to put more money in the pockets of Australians for us to then go out and spend.
But as July 1 drew closer, the messages started to feel mixed, as some economists........