01.Debt levy to come in July
High income earners will have to pay an additional two per cent on earnings over $180,000 after the Senate passed the federal government’s debt levy, a controversial measure announced in last month’s federal Budget.
The levy passed without amendments, despite the fact that two coalition members, Senator Ian Macdonald and Senator Cory Bernardi, have publicly voiced their displeasure with it – Macdonald reportedly arguing that it didn’t go far enough, Bernardi arguing it went too far. Neither formally opposed the levy however, as it passed with support from Labor.
The higher tax rate will kick off in July, and will mean those on incomes of $200,000 will pay an extra $400 in tax annually. The government has estimated that it should add $3.1bn to Australia’s coffers, though there has been significant speculation over loopholes in fringe benefit tax rates that may allow high-income earners to avoid the tax bump in its first year.