Workers in Canberra's inner suburbs are set to receive a bigger bump in their pay packets from the income tax cuts announced in Tuesday's budget than anywhere else in the country.
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Modelling by the National Centre for Social and Economic Modelling (NATSEM) has applied the three phases of the seven-year income tax cuts proposed by Treasurer Scott Morrison to average income data around the country, with some ACT suburbs set to reap the benefits more than any other suburb in Australia.
In the ACT, workers in Kingston, Braddon and Phillip will experience the most extra money in their pockets in the next financial year, while workers in Hawker, Garran and Hughes will see the smallest increase to their pay packets. Overall, all areas of the ACT are set to have at least $119 more a year to spend than they did in 2017-18.
Kingston and Braddon are among the top 10 per cent of suburbs around the country to gain the benefits in 2018-19, with workers in the trendy inner south and inner north areas to have between $178 and $268 more in their pockets.
All areas of the ACT will be in the top 50 per cent of people to benefit from the tax cuts, with Barton, Kingston and Yarralumla residents to see the highest increases of up to $9593 a year. Suburbs like Scullin, Bonner and Holt would receive the lowest increases out of ACT suburbs, of between $4001 and $4267. In contrast, the bottom ten per cent of earners around the country will experience increases of $2246-$3158 a year from 2024-25.
Associate professor at the University of Canberra and NATSEM modeller Jinjing Li said the analysis showed the income tax cuts wouldn't be felt as much by those on lower incomes.
"It is true that in terms of in term of personal incomes it favours middle incomes in 2018-19 and higher incomes in 2024-25," he said.
"People in the ACT are on average benefiting a lot more, even the worst part in the ACT is probably considered above average or at average at a national level."
Under the final phase of the tax overhaul in 2024-25, the suburb of Barton is among the suburbs to experience the greatest benefits, alongside NSW's North Sydney and Lavender Bay and East Melbourne in Victoria. The top 10 per cent of earners will end up with between $5995 and $9593 more a year, according to NATSEM's analysis.
The first stage of the income tax overhaul involves a tax offset of up to $530 for those earning between $48,000 and $90,000, with the offset decreasing gradually to zero for incomes between $90,000 and $125,000.
Between next year and 2024-25 the government will gradually increase the upper threshold of the 32.5 per cent tax bracket until it includes all workers earning between $41,000 and $200,000 a year.
The analysis also shows that across the country, workers in Labor-held seats are set to be some of the biggest beneficiaries of the plan, with residents in the electorates of Sydney, Melbourne Ports and Grayndler to end up with thousands of dollars more income in 2024.
