What Labour’s election victory means for wages, taxes, property and first-time home buyers

Anthony Albanese has been sworn in as our 31st Prime Minister, but what do the election results really mean for ordinary Australians?

It’s official: Australia now has a new prime minister after Scott Morrison’s massive defeat over the weekend.

But what does Labor leader Anthony Albanese’s historic victory mean for Australians already feeling the effects of our cost of living crisis?

According to H&R Block director of fiscal communications Mark Chapman, the change in government could affect household finances.

Here’s what it means for your bottom line.

tax cuts

According to Chapman, the so-called “stage three” tax cuts have already been legislated under the previous government, meaning they already have the green light to go ahead, unless the ALP makes an unexpected change.

To refresh your memory, the tax cuts will see the 32.5 percent marginal tax rate lowered to 30 percent to make a large tax bracket between $45,000 and $200,000 effective July 1, 2024, while the 37 percent tax bracket will be eliminated entirely.

Chapman said that high-income earners would be the big winners.

“This will be particularly effective for people with higher incomes, with earnings of $1,125 per year for someone with $90,000, rising to $9,075 per year for someone with $200,000 or more,” he explained.

tax increases

Meanwhile, the elimination of the Low and Middle Income Tax Compensation (LMITO) has also been confirmed, after former treasurer Josh Frydenberg did not extend it in the last federal budget.

According to Chapman, those who currently receive it “will notice what is effectively a tax increase when they file their 2023 tax returns.”

However, it is important to note that the LIMIT is still in place for 2022 returns.

“This could be an increase of up to $1,500 for those entitled to the full LIMIT,” Chapman said, adding that “there were no announced proposals for Labor to reverse Frydenberg’s decision.”

property taxes

There are no changes to “negative gear” or any other investment property taxes, while the general 50 percent discount for capital gains tax is also safe, Chapman confirmed.

First time home buyers

Labor previously announced the introduction of a capital contribution scheme to help early owners finally get a foot in the door.

Eligible homebuyers will need a minimum 2 percent deposit, with a Federal Government capital contribution of up to a maximum of 40 percent of the purchase price of a new home and up to a maximum of 30 percent of the purchase price. price of an existing house.

You will be eligible if you are an Australian citizen over the age of 18, earn $90,000 or less per year for individuals, or $120,000 or less per year for couples, and live in the purchased home as your primary place of residence.

You also must not own any other land or property, whether in Australia or abroad, must have saved the required minimum deposit of 2 per cent of the home price, and qualify for (and can finance) the remainder of the purchase through a standard home loan with a participating lender, plus being able to pay any associated purchase costs such as stamp duty, legal and bank fees.

Homebuyers will also be responsible for ongoing costs of ownership such as fees, tiers, and any other bills.

“During the term of the loan, the homebuyer can purchase an additional interest in the home when they are able to do so,” explained Mr. Chapman.

“The minimum stake a homebuyer can choose to buy at any one time is 5 percent.

“If a homebuyer’s income exceeds the Help to Buy annual income threshold for two consecutive years, they will be required to repay the Government’s financial contribution in part or in full as their circumstances allow.”

The new treasurer speaks

appearing in Today Monday morning, incoming treasurer Jim Chalmers told hosts Karl Stefanovic and Ally Langdon Labor that he was ready to “get down to business,” noting that ALP had inherited “a lot of challenges,” especially when it comes to the economy. .

“We have the cost of living going through the roof. We have real wages going down. We will inherit a trillion dollars of debt without enough to prove it,” she said.

“We want to start running. That is what we have done,” she said, adding that the government expected things to get worse before they got better.

“There are a number of interest rate increases that were blocked before the government changed hands. So that will make life more difficult for people,” she said.

“We’re also being punished at the gas pump, of course, right now with gas prices going up again.

“At the same time, our options are somewhat limited by the fact that we have this budget that is a trillion dollars in debt, and not enough to show it. There is a great set of challenges.”

Chalmers then confirmed that Labor “absolutely” support a minimum wage increase that keeps up with the cost of living.

“We absolutely support an outcome in the Fair Work Commission that recognizes that inflation is through the roof and that people need to catch up with that,” he said.

“We want to get real wages moving again by making the economy more productive and growing it in the right way,” he said.

“Actually, right now we’re about to see a big spike in energy prices that was already underway before the election.

“What our policy will do by introducing cleaner, cheaper energy into the system will lower energy bills. But also boost investment in the economy and create hundreds of thousands of jobs, particularly in the region, which is why we are very proud of the climate change policy.”

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