The national minimum wage passed $1,000 a week for the first time on Wednesday, one of a set of federal changes that took effect with the new financial year on July 1: tax cuts the government says reach more than 14 million people, a longer paid parental leave scheme, and higher taxes on the largest superannuation balances.
The wage rise came from the Fair Work Commission, not the government. Its annual review lifted the national minimum to $26.44 an hour, or $1,004.90 for a 38-hour week, a 4.75 per cent increase that flows through to the award rates covering about 2.8 million workers.
The tax changes are the government's. The lowest marginal rate fell from 16 to 15 per cent on income between $18,201 and $45,000. The government puts the saving from its combined tax cuts at up to $2,800 a year for someone on average earnings, though that figure stacks several years of changes together; the cut starting this week is worth about $268 a year on its own, on analysis published in The Conversation.
“From 1 July we're cutting taxes again for over 14 million taxpayers," the Prime Minister, Anthony Albanese, said in a statement, "and our combined tax cuts mean an Australian worker on average earnings will be up to $2,800 better off every year." The Minister for Employment and Workplace Relations, Amanda Rishworth, said that with the minimum wage above $1,000 a week, "millions of Australian workers will see a real boost to their pay.”
Paid parental leave extended from 120 to 130 days, a full 26 weeks, with the days reserved for a second parent rising from 15 to 20. The scheme now pays superannuation on top of the leave.
At the other end of the income scale, one concession narrowed. From this year, earnings on the part of a superannuation balance above $3 million carry an extra 15 per cent tax, and earnings on the part above $10 million an extra 25 per cent. The measure passed Parliament in March, and after the government dropped an earlier plan to tax paper gains, it applies only to earnings actually realised. The contribution caps rose as well, the concessional cap to $32,500 and the transfer balance cap to $2.1 million.
Not all of the relief is permanent. A cut to fuel excise of 16 cents a litre, passed on June 29, runs only through July before ending on August 2. It is a taper from the 32-cent cut in place since April, worth about $11 on a 65-litre tank. The $20,000 instant asset write-off for small business, by contrast, was made permanent, and a further $25 billion in public hospital funding began flowing to the states.
The wage decision and the tax changes are separate levers pulling the same way on household income. What they actually do to it will show up in the figures the Bureau of Statistics publishes over the coming months, not in the announcements that introduced them.
