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Australians will get an ‘effective pay rise’: Here’s how much to expect

Many Australians will be looking forward to the stage three tax cuts due to take effect from 1 July but unlike previous payments, they won’t be delivered in a lump sum.
The reworked version of the cuts, which provide more money to those on low and middle incomes, were included in Tuesday night’s budget, along with billions in .
The tax cut will be worth around $1,929 a year to those earning $90,000.

But this money won’t be delivered as one payment, unlike the Low and Middle Income Income Tax Offset, which saw tax refunds increased by around $1000 in previous years.

A man in a suit and tie speaks while other parliamentarians sit behind him

Treasurer Jim Chalmers delivers the 2024/25 Budget statement in the House of Representatives at Parliament House in Canberra on Tuesday, May 14, 2024. Source: AAP / LUKAS COCH

Johnathan McMenamin, a senior economist at financial services company Barrenjoey, said the stage three tax cuts were different to previous cuts because taxpayers would see money in their pay packets on an ongoing basis.

“It’ll be a smaller amount — where you will see it every week or every month (whenever you receive your pay packet) as an effective pay rise from paying lower tax,” he said.

“For example, somebody on $60,000 a year will see a weekly lift in their take home pay of about $23. And somebody on $120,000 will see something like $52 per week.

“It’s more of a modest trend lift in people’s incomes, rather than a big lump sum payment.”

A household with a combined income of around $130,000 where one partner earns $80,000 and the other $50,000, will receive around $50 a week.

To calculate the effective rise in your pay packet, use our interactive or check the table below.

McMenamin said these tax cuts had been expected for years and should not impact inflation.
“[They] won’t affect how economists and policymakers think about the outlook for the Australian economy,” he said.

Other budget measures to help with cost of living pressures were also announced, including energy bill relief for all Australians.

Table showing how much people will get back thanks to Stage 3 tax cuts

Stage 3 tax cuts and how they will impact people’s pay packets.

Help with electricity bills

All Australian households will receive , while around one million small businesses will receive $325.
This will be delivered in quarterly instalments and will appear as a direct credit on power bills.
State governments have also announced their own measures. Those in Queensland for example, will receive a total of $1300 in energy rebates.

The previous federal energy bill relief payments were only targeted to those on income support, seniors and family tax benefit holders.

Rent assistance

The maximum rates of Commonwealth Rent Assistance will be lifted by an extra 10 per cent, which will see payments increase by around $70 a fortnight.

It comes after the government lifted the maximum amount of the rent assistance subsidy by 15 per cent last year. This supplement is provided to those on lower incomes.

Nuisance tariffs

Other changes such as the may also help cost of living.
Treasurer Jim Chalmers announced earlier this year that tariffs would be scrapped on nearly 500 consumer items including fridges and washing machines from 1 July.
This will reduce the import costs of these products and should make the items cheaper.

Additional reporting by Rashida Yosufzai

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