How four Australians are going to spend their tax cuts
The real estate agent in the top tax bracket
Eva Frketic is in the top tax bracket as a property partner of Sydney real estate firm The Agency and does not feel the tax cuts will mean a change for her in terms of day-to-day family expenses.
Eva Frketic says the stage 3 tax cuts will not do much to change her family expenses.Credit: Flavio Brancaleone
“We definitely have not taken it into consideration as something that I can be reliant on having an impact on our day to day. It’s not going to be something that substantially changes or balances out the increased costs that everyone is facing,” she said.
“We’ve got a mortgage, so obviously, with the interest rate rises and where we’re at, [her stage 3 cut] … isn’t going to change too much of our world.”
A mother of a 21-year-old son and 19-year-old daughter, Frketic said the stage 3 changes did not go far enough.
“I don’t think tax cuts are enough … it’s a very selfish and short-term ability to win votes …” she said.
“[Tax] needs to be fairly weighted, so that you can then at least have some leftovers so that you can either reinvest back into your business or into your property portfolio.”
The midwife making $90,000 to $100,000 a year
Single mother Belinda Renshaw is living pay day to pay day on her income as a registered nurse and midwife.
Working night shifts to make the most of her time with her six-year-old daughter, Matilda, Renshaw said any extra cash she received from tax cuts was already allocated to bills.
“It might cover my compulsory parking fee at the hospital and that’s about it,” the nurse from the south-west Sydney suburb of Ruse said.
Belinda Renshaw, daughter Matilda and their dogs. The tax cuts may mean some nice steak on the dinner menu.Credit: Flavio Brancaleone
“I’m choosing between, do we go out with our friends or do we pay that bill …? Do I choose between taking my daughter to the movies or paying that big dental bill?”
Until contacted by this masthead, Renshaw wasn’t aware what her tax cut would be, but she has since worked out she will save about $2000 a year.
With her fixed rate mortgage up for renewal in the coming months, she predicted she may end up putting her tax savings directly onto her mortgage repayments.
Renshaw said she believed the tax cut wasn’t significant enough to add to inflation, given most of her friends and colleagues were only talking about potentially easing the cost of essentials. However, she did have one small luxury she might splurge on with the extra cash.
“It’ll maybe help with the cost of shopping, which has doubled. I might not have to look as closely at the sale section meat. My daughter loves steak; maybe I can get her a nicer cut,” she said.
The young graduates earning about $60,000 a year
Charlee Pring, 24, and Eloise Grant, 23, are housemates who moved to Melbourne for university and now have graduate jobs.
Pring, originally from Ballarat, is a graphic designer who recently left a full-time job at a real estate firm that paid about $50,000 annually for a better paying position.
Flatmates Eloise Grant (left) and Charlee Pring.Credit: Joe Armao
Grant, originally from Norfolk Island, works close to full-time hours in childcare, but is officially classified as a part-time employee. She earned about $60,000 over the past year.
Both women, who live in Kew, have supplemented their income with casual hospitality work. Neither knew how much their upcoming tax cut was until this masthead calculated it for them.
They were particularly thankful to receive a heftier cut under Labor’s changes announced in January, which broke a promise not to touch the original tax plan legislated under the previous Coalition government but extended and deepened the benefits for lower-paid workers at the expense of those on higher incomes.
“Being a teacher who studied education, I’ve had to do a lot of unpaid placements,” Grant said. “So maybe trying to put some of [the tax cut] away would be nice.”
Asked if she thought more money in people’s pockets could add to inflation, Grant said: “I guess you can only assume so. But I think with everything going on, it’s very helpful.”
Pring said she too wanted to save the bulk of her tax cut, adding: “If I was planning on spending it, it would just be on essentials due to inflation.” She said rent was a major expense.
Both women agreed a promise of another tax cut after the next election would be nice but wanted the government to spend enough to address issues like climate change.
Cut through the noise of federal politics with news, views and expert analysis. Subscribers can sign up to our weekly Inside Politics newsletter.