Over millions of Australians will be facing a hefty tax before this year 2021 ends. This will be imposed to finish within a month.
The benefits of people with a taxable income of between $48,000 and $90,000 will end in June with a $1080 low and middle-income tax offset.
There are an estimated over 3.4 million taxpayers – half of them women – who will be worse off with its removal. This is estimated by the Analysts from the Bankwest Curtin Economics Centre.
The LMITO is claimable only when the taxpayers have submitted their tax returns and this was due to end 2019/20. When other personal income tax changes were also introduced, it was subsequently extended as a stimulus measure in the last budget.
It was said by the analysts from Bankwest Curtin that the removal of the LMITO will effectively cancel out the benefits of these changes to tax thresholds for those $48,000-$90,000 earners, this will make them no better off than they were in the said years.
On May 11, Treasurer Josh Frydenberg said that he will hand down his 2021/22 budget on the said date. Whether he changes his mind over the LMITO is not yet clear.
The Treasurer’s spokesperson said, “ the government doesn’t comment on budget speculation.”
They found 60% of the 530 people on a poll believed that Mr. Frydenberg should focus on stimulating the economy, while 31% said he should repair the budget. This is according to a survey made by the Australian Financial Review.
Some of the economists are expecting that there will be a big difference in being on a good well budget compared to the predicted budget a few months ago that there will be a rise in the revenue because of the much stronger than expected economy, sharply lower unemployment, and rising of the prices of the commodity.
In December’s budget released review, a $197.7 billion budget deficit was found for the 2020/21 financial year and another $108.5 billion deficit, this was for 2021/22.
Shane Oliver, an AMP Capital chief economist believes that the deficiency could now be about $125 billion for 2020/21 and about $50 billion 2021/22.
According to the most recent Government’s monthly financial report, it showed that there’s still a deficiency in the said year until February but smaller than had been expected after 8 months.
In a short span of time, for every $US1 rise in the price of iron ore, the government gains $A250 million in revenue every year.
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