Here's How The Government's 'Deficit Levy' Might Work

Australia’s treasurer Joe Hockey. Getty / Morne de Klerk

The Daily Telegraph has details about a “deficit levy” set to be imposed on taxpayers.

There was earlier speculation a levy would be enforced, to bring the budget but to surplus. But this is the most detailed indication we’ve seen to date of how it could work. From the report:

  • It will only apply if you earn more than $80,000 per year
  • This means taxpayers in the 37 cent tax bracket would pay an extra one per cent of their taxable income — around $800 per year
  • People who earn more than $180,000 could have to pay an extra 2 per cent of their taxable income
  • The legislation would only apply if the budget is in deficit, and will terminate after the 2017-18 year

Also, according to the Daily Telegraph’s report, the government is expected to reveal on budget night that the deficit it inherited would still have been $30 billion in 2017-18 if it did not take drastic action. The Treasurer Joe Hockey expects the deficit, with the levy and spending cuts, will be mostly eliminated by then.

There’s more here.

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