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The new government tally shows that almost 8 million workers had an extra $760 million in their pockets over the past six months with COVID-driven tax cuts playing a central role in it.
Tax cuts kicked-in across the continent as a part of a plan to encourage money flow into the market through consumers while encouraging spending amongst them, which seems to be finally unfolding with retail sales picking pace across the nation.
Consumer Spending Picks Pace As Tax Benefits Hit Pockets
As per the data from the Australian Bureau of Statistics (ABS), retail sales across the nation surged by 7.0 per cent on a seasonally-adjusted basis in November 2020, significantly up against the previous month’s growth of just 1.4 per cent and the market consensus of 2.1 per cent.
Image Source: © Kalkine Group 2021
The COVID-related tax cuts had played a central role in boosting consumer spending via providing some benefits to the end-user of the retail value chain.
As per the new data compiled by the Australian Taxation Office (ATO), a total of $5.9 billion followed back to about 7.8 million consumers across the continent, thanks to the low- and middle-income tax offset over the last six months to January 2021, proving income earners up to $1,080 back on their pay over the year.
NSW Benefits the Most
The major boost to the spending across the nation had been brought forward by the stage two cuts in the Federal Budget, providing consumers $1.1 billion in tax savings over the change in the threshold of the 19 per cent tax bracket from $37,000 to $45,0000 and the change in the threshold of the 32.5 per cent tax bracket from $90,000 to $120,000.
On narrowing down the national taxing, the new data from ATO shows that NSW saved the highest with a total of 2.42 million people received an offset value of $1.81 billion along with $340 million returned to NSW through the stage two cut.
Furthermore, Victoria gained $1.47 billion along with $260 million while Queensland gained $1.25 billion along with an additional $260 million.
Image Source: © Kalkine Group 2021
Not just the consumers or households across the nation oversee Australian residents, ~ 20,000 also gained $10 million from the offset along with an additional $10 million via stage two cuts.
Words from The Federal Treasurer
Commenting on the matter, Treasurer Josh Frydenberg cited that these tax cuts had given more money to Australians over the well-earned summer break, as part of the federal government’s economic recovery plan.
Further commenting on the matter, Mr Frydenberg mentioned that these personal income tax cuts would further add ~ 50,000 of jobs in the estimated 100,000 jobs through the 2020-2021 budget personal income tax cuts along with the loss carry-back and immediate expensing incentives for businesses by the federal government.
However, while the personal income tax cuts had played a central role in boosting spending over the summer, many industry experts believe that a gradual decrease in benefits over the next financial year could reduce the net-take home by $20 a week.
