Natasha Kuncir, with Darcy, of West Mackay.
Natasha Kuncir, with Darcy, of West Mackay. Angela Seng

Why you'll get less tax back than capital city dwellers

CENTRAL and North Queenslanders will get about $200 less per capita from the Federal Government's proposed tax cuts than Sydneysiders.

The LNP's plan to flatten income tax rates by 2024-25 will result in the majority of high-income earners enjoying the benefits.

Australia Institute research shows that 54 per cent of this tax cut will go to the top 20 per cent of taxpayers.

Natasha Kuncir, from West Mackay, said she believed all Australians should be at least receiving "the same cuts across the board”.

"The cost of living is one of the biggest pressures we deal with on a daily basis,” she said.

"If we were able to take home more of our income, we would be able to pay off bills quicker, get that mortgage paid off.

"It would change our lifestyle for the better.”

Australia Institute research shows income will determine distribution of tax cuts and this is a vital part of understanding the impact they will have on communities.

Senior economist Matt Grudnoff said an analysis on the tax cuts by electorate showed the electorates that benefited most were in affluent areas of Sydney and Melbourne, with Brisbane the only electorate outside Sydney and Melbourne to appear in the top 10.

"The electorates with the highest wage earners were in inner Sydney and Melbourne, as well as Sydney's north shore and Melbourne's eastern suburbs - and would in turn would receive the a disproportionate share of the tax cut,” he said in his report.

"At the other end, the 10 electorates that would get the least amount from the Government's tax plan are mainly rural electorates and electorates in Tasmania.

"These electorates have far fewer high income earners and get a significantly smaller tax cut.”

When he analysed the geographical implications of the tax cut by regional areas, Mr Grudnoff found that per capita, people in Sydney would get about $650 while those in regional and rural areas of central and northern Queensland would get about $200 less.

That's about 30 per cent difference.

Julian Picot, of East Mackay, said: "When people get paid higher wages they should pay higher average tax rates than others”.

"Then federal taxes reduce wage inequality across the board,” he said.

The Australia Institute analysis looked at the average increase in per capita income for each of the 2019 federal electorates.

The increase would be for 2024-25, which will be the first year the government's income tax plan is fully implemented.