Stage-three tax cuts: richest 1% of Australians will save as much as poorest 65% combined, analysis shows

The richest 1% of Australians will get as much benefit from the stage-three tax cuts as the poorest 65% combined, new parliamentary budget office analysis has projected, heaping more pressure on the Albanese government to rethink its commitment to the controversial $243bn reform plan.

Labor has come under pressure to revise the tax plan, with economists warning it would make the tax system far less progressive. The changes would abolish the 37% tax bracket, lower the 35% bracket to 32.5%, and increase the top tax bracket to start at $200,000 compared with $180,000 now.

The parliamentary budget office analysis found that people on incomes over $180,000 would enjoy $117.6bn in lower taxes, compared with just $2.7bn for people earning under $60,000. Those earning below $45,000 would get no benefit.

By 2033, the top 20% of earners would get nearly $188bn of benefit, more than 77% of the total package.

Senate independents Jacqui Lambie, Tammy Tyrrell and David Pocock have backed repealing or changing the tax cuts, giving the government enough numbers in both houses to change the plan if they wished.

Bandt called on Labor to rethink its support of the tax cuts.

The push received an unlikely ally on Monday when Coalition backbencher Russell Broadbent said Labor should shelve the tax changes, arguing circumstances had changed since the former government legislated them in 2019.