One thing is for certain, surgeons, financial market dealers and mining engineers will be paying the temporary deficit reduction tax being considered for the budget.
Promises, promises: Tony Abbott
What Shorten has been waiting for
'It will sail through'
Election 2016: Shorten's plebiscite flip
Campaign highlights - and lowlights
'You're not allowed to put words in my mouth'
Negotiating decent maternity leave
Election 2016: the Coalition's 'magic savings'
Promises, promises: Tony Abbott
Introducing a possible 'deficit tax' would not break an election promise of no new taxes, says Tony Abbott. But what constitutes a broken promise in the mind of the Prime Minister?
New Tax Office figures seen by Fairfax Media ahead of their release on Wednesday show surgeons are Australia’s best-paid occupational group, reporting average taxable incomes of $352,000 in 2011-12. Adjusted for wage growth since, the average taxable income of a surgeon is likely to be $372,500, well above the $100,000 threshold being considered by the government for the phase-in of the tax.
Finance traders report average taxable incomes of $212,000, about $224,000 in today’s dollars. Mining engineers report average incomes of $146,000,equivalent to $154,200 today.
The Abbott government is likely to introduce the tax at a low level for incomes near $100,000, then gradually increase it with income to avoid a sudden step-up in tax. The tax will likely stop climbing when it hits 2 per cent.
The Tax Office figures show human resource managers, engineers and school principals report average taxable incomes near $100,000, meaning they will be hit while lower-paid occupations will be out of the firing line.
Among those occupations in the clear at average pay levels are auditors, sales managers, police officers and electricians.
But the number of Australians earning $100,000 or more is swelling.
The figures show that, between 2010-11 and 2011-12, the number of Australians earning $80,000 to $180,000 climbed 14 per cent. The number earning $180,000 or more climbed 17 per cent.
The trajectory suggests incomes of $100,000 or more will soon be quite common. At present only 14 per cent of taxpayers earn $100,000 or more, but the total is expected to swell by almost 70 per cent over the next four years.
The trend means many occupations not caught up in the tax will become caught up if it remains in place for four years, as the government is considering.
Addressing the Sydney Institute on Monday and referring to family rather than personal incomes, the Prime Minister Tony Abbott picked out the figure of $100,000 as a marker for an income that was not particularly generous. “Not for a second would I label families as rich just because they are earning $100,000 a year,” Mr Abbott said.
The number of Australians on middle incomes is shrinking. The Tax Office statistics show that, over the past year for which there are comparable figures, the number of Australians earning between $37,000 to $80,000 slid 2.6 per cent.
Those Australians who escape the tax will still be hit by an increase in the Medicare levy due this year. On July 1, the levy will climb from 1.5 per cent of most taxable incomes to 2 per cent to fund the disability scheme.
The figures show Australia’s highest earners live in postcode 2027, which takes in Edgecliff, Darling Point and Point Piper in Sydney. Their average reported taxable income is $210,000 ($223,000 in today’s dollars).
The next highest earning postcode takes in the Perth suburbs of Cottesloe and Peppermint Grove, reporting average incomes of $180,000. Melbourne’s Toorak is in third place' reporting an average taxable income of $176,000 ($186,000 today).
Victoria’s Portsea is not far behind at $174,500 ($185,000), followed by Mosman and the Spit Junction in Sydney at $164,500 ($174,000).