Millions of Australian workers are set to enjoy a tax offset for a longer period, thanks to the federal government. This is a plan that targets the low and middle-income earners in Australia. There are plans to extend the tax offset, which means that the workers will keep most of their income. The tax offset was initially introduced as a way to curb recession, which was caused by the COVID-19 pandemic. In this plan, the target is taxpayers who make between $48K and $90K and they were to get a maximum of $1,080 upon remission of their tax returns.
The tax offset was meant to be a one-time measure in the 2020/21 budget. The extension seems to excite most workers. The government is considering an extension of the tax offset plan for another year so as to help the workers get back on their feet. If all goes according to plan, this recovery plan will go all the way to 2022. Details that have emerged from The Daily Telegraph indicate that this is a move that is meant to cushion Aussies and encourage them to keep spending.
The federal government will incur a cost of up to $7 billion by extending the offset for another year. This was introduced as one of the economic stimulus measures to help the citizens to deal with the recession triggered by the global pandemic. If the plan is dropped, the Bankwest Curtin Economics Center analyst estimated about 3.4 million workers would be affected. The 1080 tax offset is only available to people who submit their tax returns.
Additional Economic Stimulus Packages
Media reports that we have come across indicate that the government is looking for all possible measures to keep the economy afloat. One of the key components that may be a part of the next budget is a $10 billion funding for the senior citizens. There have been quite a number of initiatives that have been introduced by the government. The common ones include:
- $263 million for carbon capture and its storage
- $1 billion for climate change programs
- $275.5 million for hydrogen hubs
- $565 million for international collaboration on low emission technologies
Angus Taylor, the Energy and Emissions Reduction Minister also confirmed the media reports on the expected tax cuts on Sunrise. However, he was quick to add that he would give any details on the budget as that was the Treasurer’s docket. The emphasis was that the government has always been committed to lower taxes and not higher taxes.
How Much Am I Entitled To in the 1080 Tax Offset?
The tax offset plan targets low and middle-income earners and workers who make less than $37,000 per year will get a tax relief of $255. The $1080 tax cut is for the category of workers who earn between $48,000 and $90,000. Workers who earn up to $126,000 have been phased out by the plan. In the coming days, Mr. Frydenberg is expected to address an audience in Perth, during which he will clarify the fiscal strategy undertaken by the government. The treasurer has confirmed that he would give an update before the budget is presented.
The Coronavirus pandemic forced a delay on last year’s budget and it was presented in October. There are so many stimulus measures amounting to hundreds of billions of dollars to deal with the pandemic. The government holds that repairs on the budget would only start happening when the unemployment rate is below 6%. A good number of experts like Chris Richardson, an economist believe that the government needs to be more aggressive with the joblessness target.
Get to know all about Low and middle income tax offset 2021 at ATO official website.
Tax Experts Here for You
If you are still wondering how the 1080 tax offset plan affects you, contact us. At Accurate Business & Accounting Services, we are ready to break it down for you.