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Stage 3 tax changes will benefit more nurses and midwives

Stage 3 tax changes will benefit more nurses and midwives

The vast majority of ANMF members will be financially better off under the revised Stage 3 tax cuts, to begin from 1 July.

The cuts, as originally planned, were bad policy in 2019 when they were first proposed by the Morrison Government (and ultimately supported by the then Labor Opposition) and they were even worse policy five years later, in the midst of a global cost-of-living crisis following a global pandemic unprecedented in our lifetimes.

Not only was the original plan wildly expensive, it did not benefit those who needed the financial support the most. The revised plan, announced by Prime Minister Albanese on 24 January, will see 11 million taxpayers earning up to $146k – including the majority of ANMF members – paying less tax than they would have under the earlier version of Stage 3.

For many members the new savings, compared to the original tax reduction, are significant.

Under the Coalition’s original Stage 3 proposal, a public sector EN level 2 year 5 earning a base rate of just over $71,000 would have received a tax cut of $654 per year. The Albanese Labor Government’s revised Stage 3 cuts will now see that same EN saving $1,458 dollars per year – more than double the original cut.

A public sector RN or midwife grade 2 year 8 on a base salary of $95,378 will now receive a tax cut of $2,063 compared with $1,259 under the original plan.

What will you save?

  Base salary* Original savings New savings
RUSON/M year 3 (RUSON/M 3) $57,397.60 $310 $1,114
EN level 2 year 5 (EN 2.7) $71,141.20 $654 $1,458
RN / RM grade 2 year 8 (RN/M 8) $95,378.40 $1,259 $2,063
ANUM/AMUM year 2 (NM 1.2) $110,432.40 $1,636 $2,440
NUM/MUM level 3 (NM 4) $130,509.60 $2,611 $3,415
NP year 2 (CAPR 7.2) $134,934.80 $2,920 $3,724
Exec DON group A health service (NM 9A) $197,943.20 $8,765 $4,529
*public sector rates; not including penalties, loadings and allowances

A broken promise?

Did Anthony Albanese break his promise to deliver the Stage 3 tax cuts as planned? Technically yes. Should he have ignored the pleas of those struggling with the cost of living and rent / mortgage increases? No.

Prime Minister Albanese’s changes to the Stage 3 tax cuts are both necessary in the current economic climate, and for the public good.

The original stage 3 tax cuts would have resulted in an Australian earning $45,000 paying the same tax rate as someone on $200,000, imposing a disproportionate and clearly unfair share of tax burden on the lower income earner. They would have also cost the federal government hundreds of billions of dollars – money that otherwise could be spent on aged care or subsidising primary health care or medicines.

The changes are unlikely to increase inflation, economists predict, while delivering tangible financial benefit to taxpayers: even those on $200k will still be paying less tax overall.

For members, these changes cannot come soon enough.