1 00:00:00,160 --> 00:00:02,760 Speaker 1: Good morning, everybody. Welcome to the Daily Oz. My name 2 00:00:02,800 --> 00:00:06,680 Speaker 1: is Sam Kozlowski, with you today on Wednesday the sixteenth February, 3 00:00:06,760 --> 00:00:09,680 Speaker 1: joined by Zara Sidler. We're going to be tackling a 4 00:00:10,039 --> 00:00:12,400 Speaker 1: very sexy deep dive today. Zara, it's going to be 5 00:00:12,440 --> 00:00:16,319 Speaker 1: all about tax don't switch off just yet. Tom, our 6 00:00:16,400 --> 00:00:19,040 Speaker 1: resident economics expert, is going to talk to us in 7 00:00:19,079 --> 00:00:22,080 Speaker 1: a way that we're all going to understand. But first, Zara, 8 00:00:22,239 --> 00:00:23,759 Speaker 1: what is making headlines this morning? 9 00:00:25,400 --> 00:00:27,760 Speaker 2: The big story in the last twenty four hours was 10 00:00:28,000 --> 00:00:31,440 Speaker 2: the strikes that occurred across New South Wales. So yesterday 11 00:00:31,480 --> 00:00:34,760 Speaker 2: we saw thousands of nurses and midwives across the state 12 00:00:34,840 --> 00:00:38,240 Speaker 2: go on strike asking for better pay and stricter nurse 13 00:00:38,280 --> 00:00:42,400 Speaker 2: to patient ratios. It comes after the Industrial Relations Commission 14 00:00:42,640 --> 00:00:45,320 Speaker 2: ordered the union to stop organizing the strike on Monday 15 00:00:45,640 --> 00:00:47,839 Speaker 2: due to the risk opposed to and I quote public 16 00:00:47,840 --> 00:00:50,640 Speaker 2: health and safety. New South Wales Health did issue a 17 00:00:50,680 --> 00:00:53,840 Speaker 2: statement yesterday afternoon after the strikes saying it is committed 18 00:00:53,880 --> 00:00:56,680 Speaker 2: to reaching a resolution in the best interests of our 19 00:00:56,720 --> 00:01:00,000 Speaker 2: patients and all our healthcare workers. 20 00:01:00,120 --> 00:01:03,800 Speaker 1: NRL player Jared Haynes was released from jail yesterday afternoon 21 00:01:03,880 --> 00:01:07,640 Speaker 1: after he had his sexual assault conviction quashed. Haynes was 22 00:01:07,680 --> 00:01:09,960 Speaker 1: released on bail and has been ordered to pay twenty 23 00:01:10,000 --> 00:01:12,800 Speaker 1: thousand dollars in the next seven days. He now faces 24 00:01:12,880 --> 00:01:16,200 Speaker 1: another retrial coming up. It comes after Haynes was sentenced 25 00:01:16,240 --> 00:01:18,280 Speaker 1: to five years and nine months in jail for being 26 00:01:18,319 --> 00:01:21,520 Speaker 1: found guilty of two counts of sexual intercourse without consent 27 00:01:21,880 --> 00:01:23,759 Speaker 1: Back in September twenty eighteen. 28 00:01:24,760 --> 00:01:27,680 Speaker 2: The Court of Arbitration for Sport has ruled the fifteen 29 00:01:27,800 --> 00:01:31,440 Speaker 2: year old Russian figure skater Camilla Valieva is permitted to 30 00:01:31,480 --> 00:01:35,080 Speaker 2: compete in the Beijing Winter Olympics despite failing a drug 31 00:01:35,160 --> 00:01:38,400 Speaker 2: test prior to the beginning of the games. That said 32 00:01:38,680 --> 00:01:42,920 Speaker 2: metal ceremonies won't go ahead if Valieva places in any 33 00:01:42,959 --> 00:01:44,160 Speaker 2: of these events. 34 00:01:44,520 --> 00:01:47,240 Speaker 1: And your humpt Good news. Australia Post has become the 35 00:01:47,280 --> 00:01:51,200 Speaker 1: first government business enterprise to appoint a Chief Mental Health Officer. 36 00:01:51,760 --> 00:01:53,920 Speaker 1: Their job will be to focus on the mental health 37 00:01:53,960 --> 00:01:57,400 Speaker 1: and well being of its more than sixty thousand employees. 38 00:01:57,800 --> 00:02:00,480 Speaker 1: Group CEO Paul Graham said, we have the opity to 39 00:02:00,520 --> 00:02:04,240 Speaker 1: apply learnings across a large and diverse workplace and understand 40 00:02:04,280 --> 00:02:06,760 Speaker 1: what will be effective in supporting our people and driving 41 00:02:06,760 --> 00:02:09,200 Speaker 1: a culture of change when it comes to mental health. 42 00:02:14,639 --> 00:02:17,680 Speaker 2: Today we are talking about tax cuts. 43 00:02:17,840 --> 00:02:22,680 Speaker 3: They're rewarding Australians in work and it's returning more of 44 00:02:22,760 --> 00:02:26,320 Speaker 3: their money. That's our approach the Austrange people money. 45 00:02:26,480 --> 00:02:30,480 Speaker 2: Joining me on the pod today is tda's resident tax enthusiast, 46 00:02:30,480 --> 00:02:32,680 Speaker 2: Tom Crowley. Those are words I never thought I would 47 00:02:32,720 --> 00:02:34,280 Speaker 2: be saying. Tom, Welcome to the pod. 48 00:02:34,480 --> 00:02:37,040 Speaker 3: Thanks Sarah. I love to be introduced as a tax enthusiast. 49 00:02:37,120 --> 00:02:39,520 Speaker 3: That makes me sound like a very interesting person. I 50 00:02:39,560 --> 00:02:41,840 Speaker 3: promise I'll make this more fun than that sounds. 51 00:02:42,160 --> 00:02:44,680 Speaker 2: So let's start from square one, Tom, what do you 52 00:02:44,720 --> 00:02:48,120 Speaker 2: actually mean when you mentioned tax cuts? 53 00:02:48,560 --> 00:02:51,600 Speaker 3: So the idea of a tax cut is really simple. 54 00:02:51,639 --> 00:02:54,880 Speaker 3: Of course, we know the government collects taxes from us, 55 00:02:54,919 --> 00:02:56,959 Speaker 3: and a tax cut is just a decision to give 56 00:02:57,120 --> 00:02:59,440 Speaker 3: some of that money back to us. There are a 57 00:02:59,480 --> 00:03:01,320 Speaker 3: number of differferent taxes and so there are a number 58 00:03:01,360 --> 00:03:03,800 Speaker 3: of different types of tax cuts. We could be talking 59 00:03:03,880 --> 00:03:06,360 Speaker 3: about the tax that companies pay, we could be talking 60 00:03:06,360 --> 00:03:08,240 Speaker 3: about the tax we pay when we go to the shops. 61 00:03:08,520 --> 00:03:11,920 Speaker 3: But generally speaking, and for today's purposes, we're talking about 62 00:03:12,080 --> 00:03:15,240 Speaker 3: income tax and income tax cuts. So income tax is 63 00:03:15,240 --> 00:03:16,960 Speaker 3: the tax that you pay on the money you earn 64 00:03:17,160 --> 00:03:20,000 Speaker 3: from your job. And any listener who's had to do 65 00:03:20,040 --> 00:03:23,160 Speaker 3: their taxes at tax time has probably had some familiarity 66 00:03:23,240 --> 00:03:26,600 Speaker 3: with the income tax system. And generally speaking, it's really 67 00:03:26,639 --> 00:03:30,079 Speaker 3: common in elections for governments to offer income tax cuts 68 00:03:30,080 --> 00:03:32,080 Speaker 3: so that they can say that they're giving money back 69 00:03:32,160 --> 00:03:35,520 Speaker 3: to every Australian who has a job. This election is 70 00:03:35,560 --> 00:03:38,760 Speaker 3: no exception. We're going to be talking in particular about 71 00:03:38,760 --> 00:03:42,000 Speaker 3: the Coalition's seven year tax plan, and that's what I'm 72 00:03:42,000 --> 00:03:43,960 Speaker 3: here to talk about today, and so again when we 73 00:03:43,960 --> 00:03:46,080 Speaker 3: talk about that, there are some complicated mechanics and a 74 00:03:46,080 --> 00:03:47,960 Speaker 3: bunch of different details that I'll get into, but the 75 00:03:48,000 --> 00:03:50,160 Speaker 3: basic thing to remember is this is a plan to 76 00:03:50,200 --> 00:03:52,760 Speaker 3: give people some of their money back. 77 00:03:53,080 --> 00:03:56,640 Speaker 2: So tell me about this plan. Who gets the tax cuts, 78 00:03:56,720 --> 00:03:58,760 Speaker 2: how much do they get? What do we need to know? 79 00:03:59,120 --> 00:04:01,640 Speaker 3: So I'm going to simplify the details a little bit here, 80 00:04:01,680 --> 00:04:04,560 Speaker 3: but these are the very bare bones. So there's kind 81 00:04:04,560 --> 00:04:08,160 Speaker 3: of two phases to the tax cut. So firstly, the 82 00:04:08,240 --> 00:04:11,360 Speaker 3: first stage is already in place, and it's a tax 83 00:04:11,440 --> 00:04:14,600 Speaker 3: cut for all taxpayers, So if you're in the bottom 84 00:04:14,680 --> 00:04:18,760 Speaker 3: half of taxpayers, the Coalition plan has given you about 85 00:04:18,880 --> 00:04:21,560 Speaker 3: two hundred and fifty dollars, and if you're in the 86 00:04:21,560 --> 00:04:25,520 Speaker 3: top half of taxpayers, it gives you about one thousand dollars. Again, 87 00:04:25,560 --> 00:04:28,520 Speaker 3: I'm simplifying these numbers a little bit, but that's the ballpark, 88 00:04:28,800 --> 00:04:31,200 Speaker 3: and that's in place already. So some of you may 89 00:04:31,240 --> 00:04:34,200 Speaker 3: remember getting money of roughly this magnitude when you've done 90 00:04:34,240 --> 00:04:37,000 Speaker 3: your taxes over the last couple of years, but the 91 00:04:37,000 --> 00:04:40,159 Speaker 3: government's actually doubled that amount when COVIDS come along, so 92 00:04:40,240 --> 00:04:42,479 Speaker 3: to help people out during COVID, the government double that. 93 00:04:42,560 --> 00:04:45,159 Speaker 3: So instead at the bottom half, instead of two hundred 94 00:04:45,200 --> 00:04:47,520 Speaker 3: and fifty dollars, last time you did your taxes, you 95 00:04:47,600 --> 00:04:50,240 Speaker 3: might have got five hundred dollars, And if you're in 96 00:04:50,279 --> 00:04:53,200 Speaker 3: the top half of taxpayers, it's two thousand instead of 97 00:04:53,200 --> 00:04:55,880 Speaker 3: one thousand. So the government doubled that as a COVID support. 98 00:04:56,200 --> 00:04:58,159 Speaker 3: But now its plan is to go back to those 99 00:04:58,240 --> 00:05:01,520 Speaker 3: old numbers now that COVID is over. So that's the 100 00:05:01,520 --> 00:05:04,440 Speaker 3: first stage of the plan. The second stage of the 101 00:05:04,480 --> 00:05:07,760 Speaker 3: plan hasn't happened yet. It's due in twenty twenty four 102 00:05:08,160 --> 00:05:10,560 Speaker 3: and it's basically a big tax cut for the top 103 00:05:10,600 --> 00:05:12,960 Speaker 3: ten percent of income earners, and it's worth kind of 104 00:05:13,000 --> 00:05:16,719 Speaker 3: thousands of dollars per person. So they're the two chunks 105 00:05:16,720 --> 00:05:19,600 Speaker 3: to keep in mind. There is the early stages of 106 00:05:19,640 --> 00:05:21,920 Speaker 3: the tax cut, which have been kind of chopped and 107 00:05:22,000 --> 00:05:24,480 Speaker 3: changed a little bit during COVID, and then there's the 108 00:05:24,560 --> 00:05:26,479 Speaker 3: late stage of the tax cut, which is coming in 109 00:05:26,520 --> 00:05:27,440 Speaker 3: a couple of years time. 110 00:05:27,640 --> 00:05:30,440 Speaker 2: Okay, so Tom, I am no expert in tax as 111 00:05:30,480 --> 00:05:33,120 Speaker 2: anyone who knows me will tell you. But what I'm 112 00:05:33,160 --> 00:05:35,719 Speaker 2: hearing you talking about is the top half of taxpayers, 113 00:05:35,760 --> 00:05:38,240 Speaker 2: the bottom half, the top ten percent, who are the 114 00:05:38,240 --> 00:05:41,040 Speaker 2: big winners in this tax plan? Who gets the biggest 115 00:05:41,080 --> 00:05:41,719 Speaker 2: tax cut. 116 00:05:41,760 --> 00:05:43,480 Speaker 3: Well you might not be a tax expert, Zara, but 117 00:05:43,520 --> 00:05:45,520 Speaker 3: that that's a very good question. I suppose that's the 118 00:05:45,600 --> 00:05:49,440 Speaker 3: key question when it comes to evaluating a tax cut. Unfortunately, 119 00:05:49,480 --> 00:05:53,159 Speaker 3: it's not that straightforward. So one of the reasons that 120 00:05:53,200 --> 00:05:56,240 Speaker 3: we can't just compare dollar amounts when it comes to 121 00:05:56,320 --> 00:05:59,040 Speaker 3: tax cuts is because we have something that's called a 122 00:05:59,160 --> 00:06:04,240 Speaker 3: progressive in tax system. So the basic idea of a 123 00:06:04,279 --> 00:06:07,760 Speaker 3: progressive income tax system is the more you earn, the 124 00:06:07,760 --> 00:06:12,440 Speaker 3: more you pay. There's actually, in reality, some loopholes and 125 00:06:12,480 --> 00:06:15,200 Speaker 3: some other sort of works in the system that mean 126 00:06:15,240 --> 00:06:17,080 Speaker 3: that that's not always the case in reality, but that's 127 00:06:17,120 --> 00:06:19,719 Speaker 3: the story for another day. The basic idea, the more 128 00:06:19,760 --> 00:06:23,280 Speaker 3: you earn, the more you pay. So because high income 129 00:06:23,320 --> 00:06:26,760 Speaker 3: people pay more tax, you could give everyone, say you 130 00:06:26,800 --> 00:06:30,200 Speaker 3: gave everybody a ten percent tax cut. The dollar number 131 00:06:30,240 --> 00:06:33,280 Speaker 3: of that for a high income person is much bigger 132 00:06:33,279 --> 00:06:35,080 Speaker 3: than it is for a low income person, So it's 133 00:06:35,080 --> 00:06:39,360 Speaker 3: difficult to make dollar for dollar comparisons. But once you 134 00:06:39,400 --> 00:06:41,880 Speaker 3: take that into account, it's still very very clear. Having 135 00:06:41,880 --> 00:06:44,400 Speaker 3: made all that disclaimer, it's still very very clear that 136 00:06:44,520 --> 00:06:48,080 Speaker 3: on pretty much any measure, these tax cuts overwhelmingly favor 137 00:06:48,279 --> 00:06:51,040 Speaker 3: higher income earners, and that's what a number of experts 138 00:06:51,080 --> 00:06:54,360 Speaker 3: who have evaluated this plan have concluded. Now, you might 139 00:06:54,400 --> 00:06:56,920 Speaker 3: expect that to be a controversial thing, tax cuts that 140 00:06:56,960 --> 00:07:00,320 Speaker 3: benefit higher income earners over lower income earners, but it 141 00:07:00,360 --> 00:07:02,760 Speaker 3: actually doesn't look like that's going to be controversial this time. 142 00:07:02,800 --> 00:07:06,080 Speaker 3: The Labor Party has had extensive debates in their position 143 00:07:06,120 --> 00:07:07,839 Speaker 3: on this has changed over a number of years, but 144 00:07:08,040 --> 00:07:12,400 Speaker 3: currently they support the full tax plan of the coalition government, 145 00:07:12,440 --> 00:07:14,240 Speaker 3: So that's actually not looking like it's going to be 146 00:07:14,400 --> 00:07:15,520 Speaker 3: especially controversial. 147 00:07:15,720 --> 00:07:19,080 Speaker 2: What can we expect the battleground on tax cuts to 148 00:07:19,120 --> 00:07:20,200 Speaker 2: be then if it's. 149 00:07:20,000 --> 00:07:22,480 Speaker 3: Not that well, what we're seeing this week is a 150 00:07:22,520 --> 00:07:25,160 Speaker 3: suggestion that one of the election fights might be over 151 00:07:25,200 --> 00:07:28,240 Speaker 3: this COVID support tax cut. So, as I mentioned earlier, 152 00:07:28,600 --> 00:07:31,680 Speaker 3: the government decided to double down on its initial plan 153 00:07:31,720 --> 00:07:33,640 Speaker 3: and give people an even bigger tax cut to help 154 00:07:33,680 --> 00:07:36,760 Speaker 3: them through COVID. That was a temporary measure, and that 155 00:07:36,800 --> 00:07:38,720 Speaker 3: temporary measure is due to come off in the next 156 00:07:38,840 --> 00:07:41,080 Speaker 3: year or so, and so if you like, they're kind 157 00:07:41,120 --> 00:07:44,120 Speaker 3: of undoubling the tax cut. And when you undouble a 158 00:07:44,160 --> 00:07:46,440 Speaker 3: tax cut, that's kind of a roundabout way of saying 159 00:07:46,480 --> 00:07:49,800 Speaker 3: that you're actually increasing people's taxes again. And it looks 160 00:07:49,840 --> 00:07:52,280 Speaker 3: like that might be one of Labour's attack lines coming 161 00:07:52,320 --> 00:07:55,320 Speaker 3: into this election. By taking away the COVID support, the 162 00:07:55,360 --> 00:07:59,480 Speaker 3: government's actually re raising people's taxes, and the Coalition's likely 163 00:07:59,520 --> 00:08:01,760 Speaker 3: to respond by saying, no, your taxes will be higher 164 00:08:01,800 --> 00:08:03,800 Speaker 3: under Labor And I expect that we'll be sort of 165 00:08:03,840 --> 00:08:06,200 Speaker 3: seeing both of the parties kind of trade claims about 166 00:08:06,200 --> 00:08:08,760 Speaker 3: who wants to tax more, but their focus is likely 167 00:08:08,800 --> 00:08:11,760 Speaker 3: to be on this sort of COVID tax cut support 168 00:08:11,880 --> 00:08:14,400 Speaker 3: rather than on this latest stage of the plan that 169 00:08:14,440 --> 00:08:15,760 Speaker 3: benefits highering come earners. 170 00:08:16,080 --> 00:08:19,160 Speaker 2: What advice do you want listeners to take away from 171 00:08:19,200 --> 00:08:22,920 Speaker 2: this pod the next time they hear their pollies talking 172 00:08:23,040 --> 00:08:24,160 Speaker 2: about tax cuts. 173 00:08:24,560 --> 00:08:27,560 Speaker 3: So as you've heard me say, just their politicians make 174 00:08:27,960 --> 00:08:31,040 Speaker 3: lots of claims about tax cuts. Sometimes their competing claims. 175 00:08:31,040 --> 00:08:33,440 Speaker 3: Sometimes they're confusing. It could be pretty hard to sort 176 00:08:33,480 --> 00:08:36,000 Speaker 3: through them. I think the important thing to remember is 177 00:08:36,400 --> 00:08:38,520 Speaker 3: not to get too complicated with it. Tax cuts are 178 00:08:38,600 --> 00:08:41,720 Speaker 3: essentially really simple. It's just a decision to give you 179 00:08:41,760 --> 00:08:44,120 Speaker 3: some of your money back instead of using it to 180 00:08:44,160 --> 00:08:47,320 Speaker 3: spend on government services. So the questions you've got to 181 00:08:47,320 --> 00:08:49,679 Speaker 3: ask yourself how much money am I going to get 182 00:08:49,720 --> 00:08:52,840 Speaker 3: from this tax cut? How much money are different people 183 00:08:52,920 --> 00:08:55,040 Speaker 3: high income earners and low income earners going to get 184 00:08:55,040 --> 00:08:57,120 Speaker 3: from this tax cut? And do I think that's fair? 185 00:08:57,600 --> 00:08:59,720 Speaker 3: And then the third question, I guess the bigger picture 186 00:08:59,840 --> 00:09:02,800 Speaker 3: is what would this money have been spent on? Because 187 00:09:02,840 --> 00:09:06,280 Speaker 3: of course money that's raised in taxes is spent to 188 00:09:06,320 --> 00:09:08,800 Speaker 3: fund government services, and so part of the bigger picture 189 00:09:08,880 --> 00:09:11,520 Speaker 3: is considering, well, what would this tax cud have paid 190 00:09:11,559 --> 00:09:13,640 Speaker 3: for and what will the consequences be in terms of 191 00:09:13,679 --> 00:09:16,520 Speaker 3: government spending of the money that's going back into the 192 00:09:16,520 --> 00:09:19,280 Speaker 3: pockets of individual people, so that bigger picture is the 193 00:09:19,320 --> 00:09:21,600 Speaker 3: really important thing to take into account. 194 00:09:21,720 --> 00:09:24,920 Speaker 2: Tom, I think you have successfully engaged me for a 195 00:09:25,000 --> 00:09:29,240 Speaker 2: number of minutes on tax cuts, which is excellent and unprecedented, 196 00:09:29,600 --> 00:09:31,319 Speaker 2: and it's also made me think about it in a 197 00:09:31,360 --> 00:09:33,640 Speaker 2: way I guess I don't think I necessarily would have 198 00:09:33,679 --> 00:09:36,720 Speaker 2: prior to this discussion, So it's always good to understand 199 00:09:36,760 --> 00:09:39,680 Speaker 2: the balance of things and understand why decisions are made 200 00:09:39,840 --> 00:09:42,880 Speaker 2: at the government level. On that note, we will leave 201 00:09:42,880 --> 00:09:45,880 Speaker 2: you here for today, but thank you for tuning into 202 00:09:45,920 --> 00:09:48,600 Speaker 2: another episode of The Daily Odds. If you liked this 203 00:09:48,640 --> 00:09:51,320 Speaker 2: discussion about tax cuts, or you want to know anything else, 204 00:09:51,600 --> 00:09:53,679 Speaker 2: head over to our Instagram at the Daily Ods, where 205 00:09:53,679 --> 00:09:56,400 Speaker 2: over three hundred thousand ozsies get their news every day 206 00:09:56,440 --> 00:09:58,720 Speaker 2: and we'd love to hear any of your thoughts and 207 00:09:58,760 --> 00:10:01,400 Speaker 2: you can follow the day's news there. Have a great Wednesday.