More than a fifth of the federal government’s $158 billion income tax package will flow to workers earning more than $180,000 in the coming decade, new figures have revealed.
But workers raking in more than $180,000 are expected to make up only 11 per cent of taxpayers in 2029.
The figures dissecting the coalition’s three-stage tax cut package have emerged from the Parliamentary Budget Office, in response to separate requests from Labor and the Greens.
They show 78 per cent of the tax cuts will go to those earning less than $180,000, while 22 per cent will go to those earning more.
Labor has taken particular umbrage with the final stage of the package, which flattens the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.
The opposition has been concerned too much of the stage’s benefits will go to those earning more than $180,000 and have argued the tax cuts don’t need to be legislated five years in advance.
The PBO’s analysis shows people earning under $180,000 will get the lion’s share of the benefits of the third stage.
They will get $65.7 billion, or 69 per cent of the total benefit, compared to 31 per cent of the benefit going to those earning more than $180,000.
Despite that, the analysis shows people earning more than $180,000 will make up between just eight and 11 per cent of the population between 2024 and 2029.
In a statement, shadow treasurer Jim Chalmers pointed out that gap.
Labor also appears to be sticking by to its opposition of the government’s full tax package.
“The only proposal on the table which will give everyone a tax cut this term is Labor’s proposal,” Dr Chalmers said.
Labor has always been happy with the first stage of the tax cuts, but only wants to pass the second round if they are brought forward by three years, and doesn’t want to pass the third stage anytime soon.
The coalition has ruled out splitting the bill
The Greens have seized on the figures in a last-ditch attempt to lobby crossbenchers into rejecting the coalition’s tax cuts, particularly One Nation and Tasmanian independent Jacqui Lambie.
Greens leader Richard Di Natale argues only 1.3 per cent of people in the Tasmanian seats of Bass and Braddon, and only 1.8 per cent of people in regional and rural Queensland, earn more than $180,000.
“Around the same amount of people will benefit in the prime minister’s seat of Cook alone than the Queensland electorates of Dawson, Maranoa and Capricornia combined,” he wrote to the crossbench senators.
“Stage three will do nothing for the communities around Australia who need it most.”
Taking the heat off the crossbench, Treasurer Josh Frydenberg said only Labor is standing in the way of the tax cuts.
“They fundamentally believe in higher taxes not lower taxes as we saw during the recent election campaign,” Mr Frydenberg said.
“Our tax cuts provide both short-term relief and long-term reform.”
South Australian senator Cory Bernardi is the only crossbencher to firmly support the tax cuts so far.
The Centre Alliance party, which controls two votes, are negotiating with the government on measures to reduce gas prices to ensure the tax relief isn’t chewed up by rising power bills.
Senator Jacqui Lambie has not yet declared her hand, but has previously suggested she would generally vote in a bloc with Centre Alliance.