PETER Costello dished out personal income tax cuts of $14.7 billion over four years, which gave Australia’s highest earners an extra $42.21 in their weekly paypackets.
The Treasurer said the cuts would mean more than 80 per cent of taxpayers would remain in, or below, the 30 per cent tax
bracket. In what was a preelection sweetener, Mr Costello announced a two-stage rise in the income tax thresholds for the 42 and 47 per cent tax brackets.
The first rise to the tax thresholds will kick in on July 1, 2004, when the 42 per cent threshold was raised from $52,001 to $58,001 and from July 1, 2005 it would rise again to $63,001.
The 47 per cent threshold will rise from $52,001 to $58,001 in July of 2004 and rise again from July 1, 2005 to $80,001.
Mr Costello said the rises would ensure that Australians on average earnings stayed in the 30 per cent tax bracket and were insulated from the effects of bracket creep.
”Our income tax rates should be kept as low as is consistent with our spending requirements,” he said. “People on middle incomes should not face the top rate of income tax.
The Howard Government was re-elected for the final time in 2004.