Treasury secretary John Fraser released the details at a Senate estimates hearing on Tuesday morning, providing more fuel for the political debate over the fairness of the changes. The tables show the biggest gains come over the long-term from the abolition of the 37 per cent tax bracket, creating a single bracket from $41,000 to $200,000 where all earnings are taxed at 32.5 per cent. Starting from July 2024, this will deliver an annual tax cut worth $450 to a worker on $130,000 but the benefits rise significantly for wealthier workers, reaching $5200 a year for someone with a taxable income of $200,000. Loading Replay Replay video Play video Play video This confirms estimates from economic observers over recent weeks about the share of the benefits from the creation of the contentious new tax bracket, part of the government’s plan to ease the impact of ‘bracket creep’ as inflation pushes workers into higher nominal earnings.

The new tables highlight the scale of the gains for wealthier workers from the second and third stages of the seven-year plan. The first stage, scheduled to start on July 1 if the Senate approves the package, delivers annual cuts ranging from $200 for a worker on $30,000 to $530 for a worker on $50,000 and scaling up to $665 for a worker on $90,000. Opposition Leader Bill Shorten has promised a more generous version of the first stage while reserving his options on the second and third stages, igniting a debate over the tax cuts he might deny to workers over the full seven years. The Treasury details confirm tables released at the time of the budget but add some new details including the composition of the tax cuts for workers on different incomes during the second and third stages of the reforms. Treasury secretary John Fraser released the details during a Senate estimates hearing on Tuesday. Credit:Alex Ellinghausen

The most important change in the second stage, an increase in the $90,000 tax threshold to $120,000, delivers tax cuts worth $1350 a year to all workers on $120,000 or more. The third stage, with its abolition of the 37 per cent tax bracket, expands these gains significantly to deliver a tax cut worth $1350 to all workers on more than $150,000. Treasurer Scott Morrison has presented the tax cuts as a gain for “middle income” Australians but Labor has rejected that claim, focusing its plans on workers around the average full-time salaries of about $80,000. Under the government plan, the tax cut for a worker with a taxable income of $80,000 a year would be $540 a year from stage two and the same from stage three. This would be about 0.7 per cent of taxable income. A worker on $150,000 would get a tax cut worth $2025 in stage two and this would rise to $3375 a year in stage three, or 2.25 per cent of taxable income.