1 00:00:02,759 --> 00:00:05,040 Speaker 1: My name is Lily Maddon and I'm a proud Arunda 2 00:00:05,280 --> 00:00:10,080 Speaker 1: Bunjelung Calcotin woman from Gadighl Country. The Daily oz acknowledges 3 00:00:10,160 --> 00:00:12,319 Speaker 1: that this podcast is recorded on the lands of the 4 00:00:12,360 --> 00:00:15,920 Speaker 1: Gadighl people and pays respect to all Aboriginal and Torres 5 00:00:15,920 --> 00:00:18,840 Speaker 1: Strait Island and nations. We pay our respects to the 6 00:00:18,840 --> 00:00:21,640 Speaker 1: first peoples of these countries, both past and present. 7 00:00:29,360 --> 00:00:31,920 Speaker 2: Good morning and welcome to the Daily Oss. Friday, the 8 00:00:32,000 --> 00:00:36,159 Speaker 2: nineteenth of January. I'm Sam, I'm Sarah. Prime Minister Anthony 9 00:00:36,159 --> 00:00:39,880 Speaker 2: Albanizi has confirmed the Stage three tax cuts will still 10 00:00:39,920 --> 00:00:44,320 Speaker 2: be introduced from July. This means everyone earning above forty 11 00:00:44,320 --> 00:00:47,519 Speaker 2: five thousand dollars will receive a tax cut, meaning more 12 00:00:47,560 --> 00:00:50,239 Speaker 2: money in your bank account in the second half of 13 00:00:50,280 --> 00:00:54,120 Speaker 2: this year, but it will benefit higher income earners than most. 14 00:00:54,680 --> 00:00:58,200 Speaker 2: These cuts have been controversial because many economists are worried 15 00:00:58,240 --> 00:01:01,680 Speaker 2: it will contribute to inflation, but the Prime Minister has 16 00:01:01,680 --> 00:01:04,160 Speaker 2: said it won't. We're going to tell you what you 17 00:01:04,200 --> 00:01:06,520 Speaker 2: need to know about the Stage three tax cuts in 18 00:01:06,600 --> 00:01:09,640 Speaker 2: today's deep dive. But fas Aarah, what is making headlines 19 00:01:09,760 --> 00:01:10,360 Speaker 2: this morning. 20 00:01:11,319 --> 00:01:14,800 Speaker 3: Queensland is a bracing for the possibility of more severe weather, 21 00:01:15,000 --> 00:01:18,800 Speaker 3: with warnings a tropical cyclone could make landfall next week. 22 00:01:19,280 --> 00:01:22,520 Speaker 3: The Bureau of Meteorology warned there's a high chance of 23 00:01:22,520 --> 00:01:26,080 Speaker 3: a cyclone forming over the weekend with an unpredictable tropical 24 00:01:26,160 --> 00:01:29,840 Speaker 3: load developing in the Coral Sea. Forecast has said there's 25 00:01:29,880 --> 00:01:33,039 Speaker 3: a risk of the weather system severely impacting communities on 26 00:01:33,080 --> 00:01:35,440 Speaker 3: the east coast of Queensland from Tuesday. 27 00:01:37,120 --> 00:01:40,480 Speaker 2: Two Malaysian terror suspects have pleaded guilty to their involvement 28 00:01:40,520 --> 00:01:43,480 Speaker 2: in the two thousand and two Bali bombings. Two hundred 29 00:01:43,520 --> 00:01:46,720 Speaker 2: and two people, including eighty eight Australians, died in the 30 00:01:46,800 --> 00:01:50,360 Speaker 2: terrorist attack on a popular tourist district of the Indonesian island. 31 00:01:50,920 --> 00:01:54,279 Speaker 2: Hundreds of others were wounded in the bombings. Prime Minister 32 00:01:54,320 --> 00:01:57,720 Speaker 2: Anthony Albernezi said he welcomed those responsible for the attacks 33 00:01:57,800 --> 00:02:01,560 Speaker 2: quote now finally being held accountable for their actions. The 34 00:02:01,640 --> 00:02:03,960 Speaker 2: men have been held in the US military prison of 35 00:02:03,960 --> 00:02:07,720 Speaker 2: Guantanamo Bay since two thousand and six. Both are expected 36 00:02:07,760 --> 00:02:09,000 Speaker 2: to be sentenced next week. 37 00:02:10,480 --> 00:02:13,560 Speaker 3: New research shows Greenland's glaciers and melting at a more 38 00:02:13,680 --> 00:02:17,799 Speaker 3: rapid pace than scientists had predicted. Findings published in the 39 00:02:17,840 --> 00:02:21,960 Speaker 3: academic journal Nature, showed over one thousand gigatons of ice 40 00:02:22,000 --> 00:02:25,760 Speaker 3: has melted since nineteen eighty five. That's contributing to rising 41 00:02:25,800 --> 00:02:29,320 Speaker 3: sea levels in the North Atlantic Ocean, Researchers found that 42 00:02:29,360 --> 00:02:33,240 Speaker 3: Greenland's glaciers were melting twenty percent faster than earlier estimates. 43 00:02:34,639 --> 00:02:37,960 Speaker 2: And today's good news. This one's been octopying my thoughts 44 00:02:38,000 --> 00:02:40,679 Speaker 2: for the last day or so. Four new deep sea 45 00:02:40,720 --> 00:02:44,200 Speaker 2: octopus species have been discovered near Costa Rica. The Schmidt 46 00:02:44,280 --> 00:02:48,320 Speaker 2: Ocean Institute discovered the deep sea specimens, including the thriving 47 00:02:48,440 --> 00:02:52,239 Speaker 2: nurseries of octopus eggs, during two expeditions last year. 48 00:02:56,440 --> 00:03:00,639 Speaker 3: Okay, so Sam, the government has confirmed that these new 49 00:03:00,760 --> 00:03:04,000 Speaker 3: tax cuts are coming and that means more money in 50 00:03:04,120 --> 00:03:08,200 Speaker 3: some people's bank accounts from July. Can we just start 51 00:03:08,240 --> 00:03:10,480 Speaker 3: before we actually get to the stage three part of 52 00:03:10,520 --> 00:03:15,040 Speaker 3: it all, to explain how income tax in Australia actually works. 53 00:03:15,320 --> 00:03:18,000 Speaker 2: I think there's no greater start to a Friday than 54 00:03:18,280 --> 00:03:22,440 Speaker 2: going through Australia's tax system. So settle in. Hopefully I'm 55 00:03:22,480 --> 00:03:24,560 Speaker 2: not going to make this too dry, but yeah, we 56 00:03:24,639 --> 00:03:27,720 Speaker 2: got to talk about tax. So our income tax systems 57 00:03:27,760 --> 00:03:30,680 Speaker 2: called a progressive system, and that basically means that you 58 00:03:30,760 --> 00:03:34,400 Speaker 2: pay progressively more tax the more that you earn, and 59 00:03:34,440 --> 00:03:38,000 Speaker 2: it works in stages, so very quickly, you pay no 60 00:03:38,160 --> 00:03:41,200 Speaker 2: tax on the first eighteen two hundred dollars you earn 61 00:03:41,280 --> 00:03:43,680 Speaker 2: in a year, but then every dollar you earn above 62 00:03:43,720 --> 00:03:46,840 Speaker 2: eighteen thy two hundred dollars gets taxed, and that starts 63 00:03:46,840 --> 00:03:49,839 Speaker 2: at a rate of nineteen percent, and then that goes 64 00:03:49,920 --> 00:03:52,440 Speaker 2: up in increments. That's why we call it progressive, right 65 00:03:52,520 --> 00:03:54,840 Speaker 2: up to the highest tax bracket for income over one 66 00:03:54,920 --> 00:03:57,800 Speaker 2: hundred and eighty thousand dollars, and if you're in that bracket, 67 00:03:57,840 --> 00:04:00,840 Speaker 2: you're taxed at forty five percent fair every dollar earned 68 00:04:00,920 --> 00:04:04,120 Speaker 2: above that one hundred and eighty k mark. So basically, 69 00:04:04,200 --> 00:04:05,960 Speaker 2: what you need to know through all of those numbers 70 00:04:05,960 --> 00:04:09,400 Speaker 2: and figures is that people who earn more pay more tax. However, 71 00:04:09,440 --> 00:04:11,920 Speaker 2: that's not quite true in practice because of things like 72 00:04:12,040 --> 00:04:15,080 Speaker 2: tax reductions, or how they structure their finances, how they 73 00:04:15,120 --> 00:04:18,200 Speaker 2: do their accounting, and a variety of other exceptions. 74 00:04:18,440 --> 00:04:21,080 Speaker 3: I do feel like we could do a whole episode 75 00:04:21,240 --> 00:04:24,240 Speaker 3: on why it is that those highest earners aren't paying 76 00:04:24,279 --> 00:04:26,800 Speaker 3: the most tax, but we'll put that aside for a second, 77 00:04:26,839 --> 00:04:30,560 Speaker 3: to really focus on these Stage three tax cuts. It's 78 00:04:30,560 --> 00:04:32,680 Speaker 3: been in the news for a really long time. Can 79 00:04:32,720 --> 00:04:35,119 Speaker 3: you just walk me through what the Stage three tax 80 00:04:35,160 --> 00:04:36,520 Speaker 3: cuts actually mean. 81 00:04:37,240 --> 00:04:41,000 Speaker 2: So basically, in the Stage three tax cuts, the tax 82 00:04:41,080 --> 00:04:44,719 Speaker 2: rate on annual earnings for the dollars that you earn 83 00:04:44,960 --> 00:04:48,440 Speaker 2: between forty five thousand dollars and two hundred thousand dollars 84 00:04:48,839 --> 00:04:51,120 Speaker 2: is going to be reduced. Now to zoom out a 85 00:04:51,120 --> 00:04:53,600 Speaker 2: little bit, this is the third stage of a three 86 00:04:53,600 --> 00:04:57,159 Speaker 2: stage plan to cut taxes, hence the name Stage three, 87 00:04:57,480 --> 00:05:00,320 Speaker 2: and the Stage one and Stage two tax cut were 88 00:05:00,320 --> 00:05:04,600 Speaker 2: more focused on low and middle income earners. So currently 89 00:05:05,120 --> 00:05:07,720 Speaker 2: incomes between forty five thousand and one hundred and twenty 90 00:05:07,760 --> 00:05:10,719 Speaker 2: thousand attacked at thirty two and a half percent, and 91 00:05:10,760 --> 00:05:13,279 Speaker 2: then you've got another bracket above that, between one hundred 92 00:05:13,279 --> 00:05:15,720 Speaker 2: and twenty thousand and one hundred and eighty thousand, and 93 00:05:15,760 --> 00:05:18,840 Speaker 2: that's taxed at thirty seven percent, and then above that 94 00:05:19,000 --> 00:05:21,359 Speaker 2: above one hundred and eighty thousand is taxed at forty 95 00:05:21,400 --> 00:05:24,559 Speaker 2: five percent. Now, all of that is going to change 96 00:05:24,680 --> 00:05:26,760 Speaker 2: under the Stage three tax cuts, and what's going to 97 00:05:26,760 --> 00:05:29,080 Speaker 2: happen is that there's going to be a single tax 98 00:05:29,160 --> 00:05:33,120 Speaker 2: rate of thirty percent will instead apply for all incomes 99 00:05:33,160 --> 00:05:36,280 Speaker 2: between forty five thousand and two hundred thousand dollars. 100 00:05:36,480 --> 00:05:39,200 Speaker 3: I remember my first job, when I was working in 101 00:05:39,240 --> 00:05:42,600 Speaker 3: government relations. I had a boss who tried to draw 102 00:05:42,680 --> 00:05:44,679 Speaker 3: out what progressive tax meant. 103 00:05:46,279 --> 00:05:47,560 Speaker 4: Look, we're a couple of years on. 104 00:05:49,040 --> 00:05:51,080 Speaker 2: It still kind of still bamboozles you. 105 00:05:51,320 --> 00:05:55,280 Speaker 3: Yes, So just to clarify, everyone earning between forty five 106 00:05:55,360 --> 00:05:58,520 Speaker 3: thousand dollars and two hundred thousand dollars will be taxed 107 00:05:58,600 --> 00:06:01,640 Speaker 3: at the same rate from July, and this will mean 108 00:06:01,640 --> 00:06:04,719 Speaker 3: that everyone earning above forty five thousand dollars is receiving 109 00:06:04,760 --> 00:06:07,680 Speaker 3: a tax cut, but the biggest impact will be on 110 00:06:07,880 --> 00:06:10,520 Speaker 3: high income owners, and then nothing will change for people 111 00:06:10,520 --> 00:06:12,360 Speaker 3: who earn less than forty five K a year. 112 00:06:12,400 --> 00:06:12,880 Speaker 4: Is that right? 113 00:06:13,080 --> 00:06:15,400 Speaker 2: We should call you treasurer Sideline from now on? That 114 00:06:15,560 --> 00:06:16,120 Speaker 2: was perfect. 115 00:06:16,320 --> 00:06:19,719 Speaker 3: I think anyone that knows me knows that's a terrible idea. 116 00:06:19,800 --> 00:06:22,360 Speaker 3: Getting back to it, though, I do feel like we've 117 00:06:22,400 --> 00:06:26,719 Speaker 3: been talking about Stage three tax cuts for an incredibly 118 00:06:26,800 --> 00:06:27,440 Speaker 3: long time. 119 00:06:27,720 --> 00:06:29,640 Speaker 4: When did this all get decided? 120 00:06:29,839 --> 00:06:32,840 Speaker 2: Well, to find the roots of this modern plan, we 121 00:06:32,880 --> 00:06:35,800 Speaker 2: need to go back to Scott Morrison, not only when 122 00:06:35,800 --> 00:06:37,760 Speaker 2: he was Prime minister, but even before that when he 123 00:06:37,839 --> 00:06:41,120 Speaker 2: was treasurer, and so back in twenty eighteen and twenty nineteen, 124 00:06:41,279 --> 00:06:44,839 Speaker 2: the then coalition government announced this three stage plan to 125 00:06:44,839 --> 00:06:47,760 Speaker 2: cut taxes. As I've been saying throughout, we're now at 126 00:06:47,760 --> 00:06:51,239 Speaker 2: this stage three point now. At the time the Labour Party, 127 00:06:51,240 --> 00:06:54,479 Speaker 2: who were in opposition, voted in favor of those tax cuts, 128 00:06:54,480 --> 00:06:57,000 Speaker 2: so there were four the plan. And during the election 129 00:06:57,120 --> 00:07:00,800 Speaker 2: campaign in twenty twenty two when Anthony Albernezi one, they 130 00:07:00,839 --> 00:07:03,360 Speaker 2: promised to keep them in place if they were elected, 131 00:07:03,880 --> 00:07:06,560 Speaker 2: and so we know they were elected. And since then 132 00:07:06,640 --> 00:07:10,720 Speaker 2: they've consistently faced this pressure to cancel the stage three 133 00:07:10,760 --> 00:07:14,040 Speaker 2: tax cuts. And as this July date, whether stage three 134 00:07:14,080 --> 00:07:16,920 Speaker 2: cuts are meant to be coming into place, that pressure 135 00:07:16,960 --> 00:07:18,000 Speaker 2: has been increasing. 136 00:07:18,200 --> 00:07:21,640 Speaker 3: I think a lot of people might be confused with that, 137 00:07:21,720 --> 00:07:24,720 Speaker 3: specifically because a lot of us would be thinking more 138 00:07:24,760 --> 00:07:28,520 Speaker 3: money in our bank account. That sounds pretty good, especially 139 00:07:28,760 --> 00:07:30,640 Speaker 3: in the cost of living crisis we're in. 140 00:07:30,800 --> 00:07:32,720 Speaker 4: So what's the issue here. 141 00:07:32,600 --> 00:07:34,800 Speaker 2: Well, this is where things get really interesting and we 142 00:07:34,920 --> 00:07:38,600 Speaker 2: have to start bringing in different economists to have different arguments. 143 00:07:38,720 --> 00:07:42,480 Speaker 2: There's different theories about what will happen in a world 144 00:07:42,520 --> 00:07:45,560 Speaker 2: where there's Stage three tax cuts. But basically, what some 145 00:07:45,720 --> 00:07:48,600 Speaker 2: economists are saying is that these tax cuts could actually 146 00:07:48,600 --> 00:07:51,840 Speaker 2: make the cost of living crisis worse. And the reason 147 00:07:51,880 --> 00:07:54,920 Speaker 2: why they're saying that is economists argue that by giving 148 00:07:55,120 --> 00:07:57,960 Speaker 2: more money to high income earners, that could drive up 149 00:07:58,040 --> 00:08:01,600 Speaker 2: how much people are spending. And when we have more 150 00:08:01,640 --> 00:08:05,600 Speaker 2: spending in the economy, we see prices increase because there's 151 00:08:05,680 --> 00:08:08,800 Speaker 2: higher demand. And so to put that in really simple terms, 152 00:08:08,840 --> 00:08:10,960 Speaker 2: they're worried it's going to mean there's too much money 153 00:08:11,000 --> 00:08:14,080 Speaker 2: in the economy and not enough supply. You would have 154 00:08:14,120 --> 00:08:17,360 Speaker 2: heard businesses talking for a while about supply chain issues 155 00:08:17,440 --> 00:08:19,400 Speaker 2: over the last couple of years. I mean that's been 156 00:08:19,680 --> 00:08:22,960 Speaker 2: enhanced by the war in Ukraine, and as people compete 157 00:08:22,960 --> 00:08:25,800 Speaker 2: with one another to buy what's available, or you know, 158 00:08:25,920 --> 00:08:28,320 Speaker 2: the small pool of what is available, prices are going 159 00:08:28,360 --> 00:08:30,240 Speaker 2: to go up. I want to take you through two 160 00:08:30,280 --> 00:08:33,120 Speaker 2: examples of how this could impact the economy, one super 161 00:08:33,120 --> 00:08:35,560 Speaker 2: big and one super small. So let's go big first, 162 00:08:35,559 --> 00:08:37,920 Speaker 2: and let's talk about housing. Let's say that everyone had 163 00:08:37,920 --> 00:08:41,760 Speaker 2: more money to spend on a potential future home. That 164 00:08:41,800 --> 00:08:44,120 Speaker 2: would mean that at least for the short term, there's 165 00:08:44,160 --> 00:08:46,520 Speaker 2: more people at an auction, and if there's more people 166 00:08:46,559 --> 00:08:48,800 Speaker 2: at an auction, then the prices are going to be 167 00:08:48,840 --> 00:08:51,440 Speaker 2: typically higher. Now, the way that the government could solve 168 00:08:51,480 --> 00:08:53,800 Speaker 2: that is by increasing the number of houses there are 169 00:08:53,800 --> 00:08:56,680 Speaker 2: in Australia in terms of supply. But we know it 170 00:08:56,720 --> 00:08:59,559 Speaker 2: takes time to build more houses, so even assuming that 171 00:08:59,720 --> 00:09:02,560 Speaker 2: enough houses were built for the demand in the market, 172 00:09:02,679 --> 00:09:04,880 Speaker 2: there'd still be a crunch period where the price of 173 00:09:04,920 --> 00:09:07,480 Speaker 2: housing would go up really quickly. And then I often 174 00:09:07,520 --> 00:09:10,080 Speaker 2: think it's really helpful to think of a tiny example. 175 00:09:10,120 --> 00:09:11,920 Speaker 2: So think about a restaurant and you're going out for 176 00:09:11,920 --> 00:09:15,400 Speaker 2: dinner on a Saturday night. After these Stage three tax cuts, 177 00:09:15,559 --> 00:09:18,000 Speaker 2: more people could have more money to spend on nice 178 00:09:18,000 --> 00:09:20,560 Speaker 2: things like going out for dinner. So more people go 179 00:09:20,600 --> 00:09:23,160 Speaker 2: and make a reservation at a really nice restaurant, and 180 00:09:23,200 --> 00:09:26,600 Speaker 2: because that restaurant is suddenly a lot busier, the restaurant 181 00:09:26,600 --> 00:09:29,080 Speaker 2: can raise prices on a plate of food from twenty 182 00:09:29,120 --> 00:09:31,760 Speaker 2: five bucks to thirty five bucks. And that's a really 183 00:09:31,800 --> 00:09:35,360 Speaker 2: simple way of explaining inflation. But again, to be super clear, 184 00:09:35,400 --> 00:09:38,120 Speaker 2: this is only what some economists are saying in terms 185 00:09:38,160 --> 00:09:41,480 Speaker 2: of the effect of Stage three tax cuts, because there 186 00:09:41,480 --> 00:09:44,040 Speaker 2: are some economists who on the flip side are saying 187 00:09:44,120 --> 00:09:47,600 Speaker 2: that income tax has a very small impact on inflation 188 00:09:48,160 --> 00:09:50,240 Speaker 2: and that these cuts aren't really going to be big 189 00:09:50,320 --> 00:09:53,120 Speaker 2: enough to make that much of an impact. So they 190 00:09:53,120 --> 00:09:55,760 Speaker 2: say those nice places of food or those house prices 191 00:09:55,800 --> 00:09:57,640 Speaker 2: are going to pretty much remain the same. 192 00:09:57,480 --> 00:09:57,880 Speaker 1: All right. 193 00:09:57,960 --> 00:10:01,000 Speaker 3: So those are some of the concerns that some economists 194 00:10:01,000 --> 00:10:04,880 Speaker 3: told around what could happen with these Stage three tax cuts. 195 00:10:05,480 --> 00:10:07,760 Speaker 3: The government is still pushing ahead with it, though, So 196 00:10:08,000 --> 00:10:09,280 Speaker 3: what is the opposition saying? 197 00:10:09,600 --> 00:10:11,720 Speaker 2: Well, remember, they're the ones that came up with this 198 00:10:11,760 --> 00:10:15,240 Speaker 2: plan in twenty eighteen, twenty nineteen, and their stance on 199 00:10:15,280 --> 00:10:17,960 Speaker 2: the plan hasn't changed. They want the tax cuts to 200 00:10:18,000 --> 00:10:21,600 Speaker 2: go ahead. This week, Shadow Treasurer Angus Taylor urged the 201 00:10:21,600 --> 00:10:24,880 Speaker 2: government to make what he described as an unambiguous commitment 202 00:10:25,040 --> 00:10:25,640 Speaker 2: to the cuts. 203 00:10:25,760 --> 00:10:28,520 Speaker 4: And that's why we're talking about it today, right because. 204 00:10:28,200 --> 00:10:31,439 Speaker 2: He did exactly so. Anthony Albanezi stood up on Wednesday 205 00:10:31,480 --> 00:10:34,240 Speaker 2: and gave a super simple answer to being asked about 206 00:10:34,240 --> 00:10:37,120 Speaker 2: the tax cuts. He said the tax cuts will happen 207 00:10:37,200 --> 00:10:41,200 Speaker 2: in July, and he's also previously denied that the tax 208 00:10:41,240 --> 00:10:44,679 Speaker 2: cuts will cause inflation, but the government hasn't provided the 209 00:10:44,720 --> 00:10:47,440 Speaker 2: specific modeling to really prove this, so we're going to 210 00:10:47,440 --> 00:10:48,160 Speaker 2: have to wait and see. 211 00:10:48,320 --> 00:10:48,640 Speaker 4: Sam. 212 00:10:48,760 --> 00:10:51,760 Speaker 3: Thanks for making tax sound not so boring on a 213 00:10:51,760 --> 00:10:55,000 Speaker 3: Friday morning, and thanks everyone for listening to The Daily 214 00:10:55,080 --> 00:10:59,480 Speaker 3: OZ before we go. Stay tuned for Monday's episode because 215 00:10:59,600 --> 00:11:02,040 Speaker 3: The Daily OS has some very exciting news that will 216 00:11:02,040 --> 00:11:03,760 Speaker 3: be announcing until then. 217 00:11:04,040 --> 00:11:10,840 Speaker 4: Have a fabulous weekend, MHM.