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Tax cuts, what tax cuts?
Research undertaken by the National Tax and Accountants’ Association (“NTAA”), has today revealed that recent interest rate hikes now exceed the tax cuts that have applied to average Australians from 1 July 2006. In fact, the average Australian is now $601 worse-off after taking into account the two recent interest rates hikes.
Information supplied by the Australian Bureau of Statistics (“ABS”) for February 2006, revealed that the average weekly salary of a full-time employee was $1,084 or $56,378 annually. From 1 July 2006, this means that an employee earning the average annual amount of $56,378 will receive tax cuts of $510.
However, recently reported information indicates that the average mortgage is $222,200 and this translates to additional interest payments of $1,111, after taking into account recent interest rate increases of 0.5% (i.e., during May and August 2006).
This means that the average Australian is now $601 (i.e., $1,111 - $510) worse-off, after taking into account the so called “tax cuts” (from 1 July 2006) and the recent interest rate hikes.
Andrew Gardiner, Spokesman for the NTAA today stated “Our research clearly illustrates that the last round of tax cuts have effectively been “stream rolled” by the interest rate hikes. It’s little wonder that many Australians will again be asking themselves, where did my tax cuts go?”
Andrew Gardiner also stated “Unfortunately, for many Australians these interest rate hikes will represent the straw that broke the camel’s back”.
