Working-class communities in Coalition-held remote and regional electorates stand to gain the most from Labor’s proposed changes to income tax cuts, while voters in the byelection seat of Dunkley are also big winners.
The average taxpayer in Whitsunday, in the electorate of Dawson, East Pilbara in Durack, and Cairns in Leichhardt stands to gain over $600 more from Labor’s package than the Morrison government’s stage-three tax cuts, according to an analysis by the Australian National University associate professor Ben Phillips.
In Frankston, the centre of the seat of Dunkley where Labor and the Coalition will contest a byelection on 2 March following the death of MP Peta Murphy, the average taxpayer is $478 better off.
While suburbs in Liberal-held seats including La Trobe, Leichhardt, Forde and Herbert stand to gain the most from the government’s proposal, the analysis also shows risks for Labor.
In Labor’s inner-city seats, the suburbs in Reid, Higgins, Bennelong, Kingsford Smith and the prime minister’s own seat of Grayndler are likely to lose out relative to the original stage-three policy.
The biggest losers are higher socioeconomic status areas including suburbs in all the teal independents seats – Warringah, Wentworth, North Sydney, Mackellar, Goldstein, Kooyong and Curtin – and Sydney metro Liberal seats Bradfield, Berowra and Mitchell.
Labor’s new tax cuts would give back $359bn over 10 years to Australians, delivering gains to all taxpayers earning less than $146,486, doubling tax relief for those on the average income including gains of $804 for middle-income earners.
The ANU analysis looked at the average difference in disposable income between the legislated stage-three tax cut and Labor’s new policy by modelling the Australian income tax and welfare system under both policy settings.
It shows the vast majority of statistical areas as designated by the Australian Bureau of Statistics stand to benefit from the changes, with nearly 90% of regions better off under the new proposal.
The average improvement in tax cut in Whitsunday will be $718, while an average taxpayer in east Pilbara will get $645 and Cairns south $625.
The next biggest winners were: Casey, in Labor-held Holt; Browns Plains in treasurer Jim Chalmers’ seat of Rankin; and Moree-Narrabri in the Nationals’ seat of Parkes.
Phillips told Guardian Australia it was “lower or middle-income areas” that did the best under the Labor proposal, where “people were previously not getting anything under stage three” because they earned less than $45,000.
Phillips said these “working-class” areas are “not necessarily the most disadvantaged” in Australia. The most disadvantaged areas have a high proportion of retirees who are “not impacted because they are not paying tax”, or higher levels of unemployment, with more people receiving government payments such as jobseeker who are not paying tax and thus see “no real benefit” from the reformed package, he said.
Labor’s tax proposal halves the benefit to people earning more than $190,000, slashing $4,500 from the dividend they would have received under stage-three cuts.
Phillips said “areas with a high share of persons with very high incomes are those most negatively impacted”, particularly in the inner suburbs of Sydney.
The package has the biggest negative impact in Manly in independent Zali Steggall’s seat of Warringah, where the average taxpayer will be $2,251 worse off according to Phillips’ analysis.
The average taxpayer will be more than $1,000 worse off in Leichhardt in Anthony Albanese’s seat of Grayndler (-$1,670); Ku-Ring-Gai in Bradfield (-$1,662); the northern tip of Sydney’s eastern suburbs, in Wentworth (-$1,487); Cottesloe-Claremont in the Perth seat of Curtin (-$1,251), North Sydney-Mosman in the Warringah and North Sydney electorates (-$1,206); and Bayside in Goldstein (-$1,012).
On Sunday, Albanese recognised the impact on some higher-income Labor voters, acknowledging that there are “a few” who are likely to be worse off in his own seat of Grayndler.
“And do you know what they’ve said to me,” Albanese told Sky News, “they’ve said to me, as we’ve gone around, they understand that so many people are under financial pressure.”
Albanese noted those earning more than $190,000 will still receive a “significant” $4,500 tax cut.
The deputy Liberal leader, Sussan Ley, described Labor’s package as a “lifetime tax on aspiration”.
“Here in Sydney there’s Bennelong, Reid; in Western Australia, [where] I’ve just come back from, there’s Pearce, Hasluck, Swan, Tangney; Higgins in Melbourne,” she told Sky News.
“Every one of those members of parliament stood there at the last election, they were voted in as Labor members based on no changes to Labor’s tax policy, so they were voted in on a lie.
“In the teal seats, people may also be thinking: ‘did our independents help us?’ They’re pretty powerless in the face of this.”
