Two income groups face the biggest hit from bracket creep
Workers earning $45,000 and $190,000 lose more than half their income growth to bracket creep.
Bracket creep happens when tax brackets don't move with inflation, so workers slide into higher tax brackets over time without a pay rise. A person earning about $45,000 today would face a 5+ percentage point increase in their average tax rate over ten years from 2028.
Someone earning about $190,000 would face a 4+ point rise. Workers earning $45,000 and $190,000 lose more than half their real income growth to extra tax.
Most other Australian taxpayers also lose at least 2 percentage points. The federal opposition has promised to index brackets to inflation if elected, but economist Saul Eslake said he doubts governments will find spending cuts to offset the cost.
- $45,000
- Lowest income threshold
- $190,000
- Highest income threshold
- 5+ percentage points over 10 years
- Tax rate increase at $45,000
- More than half
- Real income growth taxed
Why it mattersMost Australian workers pay rising taxes year after year without any policy choice, and the worst hit are ordinary wage earners and high earners close to tax bracket thresholds.
AustraliaEvery Australian worker faces bracket creep unless the government changes tax brackets to match inflation, a direct hit to take-home pay across the income spectrum.
✓ Claims checked against the source. checked 6 h ago
