Australia markets closed

    +37.90 (+0.48%)

    +0.0009 (+0.15%)
  • ASX 200

    +36.50 (+0.48%)
  • OIL

    -1.09 (-1.32%)
  • GOLD

    +9.30 (+0.39%)
  • Bitcoin AUD

    -1,548.15 (-1.58%)
  • CMC Crypto 200

    0.00 (0.00%)

Biggest losers from stage 3 tax cuts

The controversial tax cuts will widen the divide between the capitals and rural areas.

Australian walking in the city. Australian money notes. Taxpayers.
Rural and regional Aussies will get the least from the stage three tax cuts. (Source: Getty)

Rural and regional Aussies will be the biggest losers from the upcoming stage three tax cuts, according to new analysis.

A report from the Australia Institute revealed those living in high-income, inner-city electorates would receive the lion’s share of the benefits, while rural electorates would benefit the least.

Of the 20 federal electorates that will benefit the least from the tax cuts, 12 are located in rural seats and four are in Tasmania. Of the top 20 expected to reap the biggest rewards, half are in Sydney and a quarter are in Melbourne.


“This data shows the bush and rural electorates will largely miss out on what are effectively tax cuts for rich people in the big smoke,” Australia Institute senior economist Matt Grudnoff said.

“That’s a problem for Australians struggling with cost of living and for a government which says the federal budget lacks revenue for essential services in health, education, aged care and the NDIS.”

Lyons in Tasmania would be the biggest loser from the tax cuts, the report found, paying just $39 million less in tax. North Sydney was set to be the biggest winner, paying $331 million per year less in tax.

Just 1 per cent of taxpayers in Lyons earn more than $180,000 per year, compared to 14 per cent of taxpayers in North Sydney.

What are the stage 3 tax cuts?

Due to come into effect from July 2024, the stage three tax cuts will abolish the existing 37 per cent tax bracket, lower the existing 32.5 per cent to 30 per cent, and raise the threshold for the top tax bracket from $180,000 to $200,001.

That means people earning between $45,000 and $200,000 will pay the same 30 per cent marginal tax rate.

Ahead of the May federal budget, the government has reiterated there has been no change to its position. The government is still planning to implement the changes, which were legislated by the former Coalition government.

The Australia Institute is calling on the government to scrap or substantially change the stage three tax cuts.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.