The Albanese government's redesign of the Stage 3 tax cuts — announced in January 2024 — was presented as a fairer redistribution that delivered more to low and middle-income earners. The distributional modelling supports this claim in relative terms. In absolute terms, the picture is more complex.
The original Stage 3 design would have delivered an average benefit of $9,075 per year to those earning over $180,000. The redesigned version delivers $4,529 to the same cohort — a reduction of 50%. Those earning between $45,000 and $120,000 received larger cuts than under the original design.
Key findings:
- Earners over $180,000: benefit reduced from $9,075 to $4,529/year
- Earners $45,000–$120,000: benefit increased by average $804/year
- Total cost of redesigned cuts: $359 billion over 10 years
- Original cost: $243 billion over 10 years
- Net additional cost of redesign: $116 billion
- Pre-election commitment to original design: explicit, repeated
The government broke an explicit pre-election commitment. The redesign may well be better policy. Both things can be true.