Unpacking the Stage 3 tax cut changes

Changes to the stage three tax cuts have dominated headlines in recent days and have reignited calls for holistic tax reform.

BDO Tax Partner Mark Molesworth appeared across print, online and broadcast media to help explain the changes, and reinforce our calls for a review of Australia’s tax mix.

Comments on the changes:

  • “The gold standard to address this would be to index the tax thresholds, which is actually done with HECS repayment thresholds, in line with inflation each year,” BDO tax partner Mark Molesworth said.
  • “In reality what is done is that every so often a government will either increase some of the thresholds or reduce some of the rates. Both versions of the stage three tax cuts do a bit of both.
  • “It’s also important to note that changing the lower bands and rates affects the tax paid by all taxpayers – because even taxpayers with high incomes pay the lower rates on their lower slices of income.”

 Comments on tax reform:

  • “We hope that these changes are the first step towards a more meaningful conversation around the tax mix in Australia,” said Molesworth
  • “Our tax system is overly reliant on personal income tax receipts — something that has been repeatedly identified as economically depressing by the OECD and IMF.
  • “Tax reform requires more than just the tinkering of tax thresholds and rates,” Molesworth continued.
  • “We hope politicians of all political persuasions will be willing to commit to real reform of our tax mix to encourage economic growth and productivity.”

Media coverage:


For more information:
Jotham Lian
Media Manager