Increasing participation, competitiveness and saving
The personal income tax cuts demonstrate the Government’s commitment to rewarding participation.
The reduction of the lowest marginal tax rate to 15 per cent will assist low income earners and provide an additional incentive to enter the workforce.
Over 80 per cent of taxpayers face a top marginal tax rate of 30 per cent or less.
Our strong economy, lifestyle advantages and changes to the top two thresholds in this budget will increase incentives to work in Australia.
Taxpayers will not reach the highest marginal tax rate until they earn around three times average weekly earnings.
The top marginal rate will apply only to 3 per cent of taxpayers from 2006-07.
Abolishing the superannuation surcharge will encourage people to make additional savings to improve their standard of living in retirement.
The Government assists low to middle income employees make additional voluntary superannuation contributions.
In the 2004-05 Budget, the Government increased the generosity of the superannuation co-contribution.
Our top income threshold will rise to more than twice the average production wage (the international way of comparing earnings)
*Average production wage is the full-time
wage of a worker in the manufacturing sector
Based on OECD data
Increasing Australia’s international competitiveness
9 2005-06 Budget Overview