The Australian Government’s plan to reduce margins on income tax for workers in high-paying industries such as mining has received a positive response from the industry.
The Coalition, which yesterday revealed its three-stage, $158 billion tax package publicly, is set to bring notable tax relief to miners across the country.
In stage one, the plan will introduce a low and middle income tax offset (LMITO) to increase the 32.5 per cent personal income bracket from $87,000 to $90,000.
Stage two will succeed stage one from 2022-23, introducing a low income tax offset (LITO) that will further increase the 32.5 per cent bracket from $90,000 to $120,000, while also increasing the 19 per cent bracket from $37,000 to $41,000.
In stage three, set for introduction in 2024-25, the package will increase the upper bound of the 32.5 per cent bracket from $120,000 to $200,000, eliminate the 37 per cent bracket, and increase the 45 per cent bracket from $180,001 to $200,001.
It is stage two and stage three of the plans that are the most relevant stages to the mining industry, given the high-paying nature of the work.
Australasian Institute for Mining and Metallurgy (AusIMM) research found that over 75 per cent of respondents in a 2018 survey of resources workers under 30 years of age earned more than $100,000 a year, many of whom were in graduate positions.
“Many of our graduate role salaries and workers under 30, are contributing their sought-after skills to a growing industry and saving for a housing deposit or paying off university loans,” AusIMM chief executive officer Stephen Durkin said.
Durkin praised the decision to revise the tax brackets in a statement, stating that it would help to stimulate the economy in hard-hit regions.
“Australia has some of the greatest professional expertise in the global resources industry, and this is recognised with competitive salaries that help fuel local economies, particularly in regional and remote communities,” he said.
“Tax cuts provided could go a long way to assist in stimulating regional and rural communities, particularly those that are hit hardest during downturns, droughts, and rising unemployment.”
Minerals Council of Australia (MCA) chief executive officer Tania Constable echoed Durkin’s comments, saying the tax cuts would help to address “bracket creep”, stimulate economic growth and returning earnings to the “pockets of Australia’s minerals workforce and their families”, particularly for workers in regional communities.
“Lower taxes are good for local businesses in the regions because they give workers and families greater capacity to support the retail and services sector and other firms in Australia’s towns and regional cities,” Constable said.
“In turn, this spending boosts the regional economies in which our world-leading minerals companies operate.”