2014 Budget Countdown: 5 days to go

A debt tax now seems a sure thing, but it may only hit those earning at least $150,000 a year.
 
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01.Threshold could move to at least $150,000

Professionals earning middle and high incomes will be affected by tax increase

A new income tax as part of the Abbott government's plan to return the Budget to surplus now seems like a done deal, but the income threshold has apparently been readjusted.

Previous indications were that a new debt levy, aka the "Tony tax", would take one per cent from employees earning over $80,000 (a minimum of $800) and two per cent from those earning over $180,000 (a minimum of $3600).

While those earning $80,000 were previously categorised at "high-income earners", the debt levy will now apparently be imposed only on those earning $150,000 or more. Whether the rate will be one or two per cent probably won't be confirmed until Budget night. 

Other proposals making the rounds include raising the limit to $180,000 and imposing the new tax for only two years instead of four. 

The shift apparently came about in part due to concerns that earners in the $100,000-$130,000 range will also be hit by a reduction in family payments. 

New fuel tax on the cards

Income earners at all levels would be hit by a new budget idea under discussion – an increase in the fuel excise tax, which has been locked at 38.1c a litre since 2001. While an increase of 3c per litre was reportedly discussed earlier, government officials have not been specific about the size of any increase.

Where the highest earners live

Under any debt tax scenario, those who'll pay the most will be people working in Australia's highest-paying professions, revealed in ATO figures for 2011-12 to be surgeons (earning $350,000), finance dealers (earning just over $210,000), and judges (earning $180,000).

The ATO figures also revealed where the highest earning professionals live:

  • Sydney suburbs dominate the top 10 list for those with the highest average taxable individual income. Darling Point, Edgecliff, Rushcutters Bay and Point Piper all had an average of $210,000 or more. 
  • Perth suburbs Cottesloe and Peppermint Grove had an average taxable income of about $180,000. 
  • Hawksburn, Toorak and Portsea in Victoria pipped in at $175,000. 

And NSW put in another showing, with Mosman, Spit Junction, Dover Heights, Watsons Bay, Rose Bay North and Vaucluse dwellers earning an average $160,000 in taxable income, followed by Northbridge, Bellevue Hill, Hunters Hill, Woolwich and Woollahra on $150,000.

 
 

 

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