The Coalition’s tax policies focus on simplifying the tax system, and will cost the government $158 billion over the next ten years. The Coalition's policies include:
- Low and middle-income tax rebate: the Coalition will pay Australians on incomes between $48,000 and $90,000 a tax rebate of $1,080 with tax returns. Taxpayers who earn less than $37,000 will get a rebate of up to $255. Taxpayers on more than $125,333 will get nothing but will benefit from an increase in the point at which the second highest rate cuts in
- July 2022 cuts: the Coalition will lift the threshold for the 19% income tax bracket from $37,000 to $45,000
- July 2024 cuts: the Coalition will cut the 32.5% marginal tax rate to 30% and eliminate the 37% bracket creating a flat marginal rate of 30% between $45,000 and $200,000
- instant asset write-off: the Coalition will lift the instant asset write-off ceiling for small businesses from $25,000 to $30,000. Medium size businesses with turnovers of up to $50 million will get access to the scheme.
Labor has focused on cutting tax concessions and closing loopholes, which will save $154 billion over ten years. Labor's policies include:
- Dividend imputation: Labor will remove the cash payment of company tax refunds to dividend holders that don't pay tax for July 2019. Charities, non-profits, pensioners and part pensioners (including future pensioners) exempt. Self-managed super funds that had pensioner members at the time of Labor's announcement also exempt
- negative gearing: Labor will limit negative gearing on many investments from January 2020. Investors will be able to deduct investment losses from other investment income but not from salaries. Exempted and able to negatively gear as before will be existing investments and investments in newly-built investment properties
- capital gains tax: Labor will halve the capital gains tax discount for all assets purchased after 1 January 2020. This will reduce the capital gains tax discount from assets held longer than 12 months from 50% to 25%
- trusts: Labor will fight "income splitting" by introducing a new 30% standard minimum rate of tax for discretionary trust distributions to beneficiaries aged over 18. It will apply from July 2019. It will not apply to farm trusts, charitable and philanthropic trusts and a range of other trusts
- accountant deductions: Labor will limit to $3,000 the amount an individual can claim for the cost of managing their tax affairs. This would stop high income earners being able to reduce their taxable income to zero
- multinational tax avoidance: a 19-point policy aimed at recapturing about $600 million per year
- superannuation concessions: Labor will lower the annual non-concessional contributions cap to $75,000, further lower the High Income Superannuation Contribution threshold to $200,000, and reverse the Coalition's introduction of catch-up concessional contributions and changes to tax deductibility for personal contributions
- future tax cuts: Labor will reverse the Coalition income tax cuts planned for 2022 and 2024, replacing them with tax cuts worth around $200 billion over ten years when the budget position has improved
- temporary budget repair levy: Labor will reimpose the temporary budget levy of 2% on incomes above $180,000 imposed by the Coalition in between 2014-15 and 2016-17. It will remain in place until the budget surplus has reached 1% of GDP, which is expected in 2022-23
- low and middle-income tax rebate: Labor will support and extend (for those on lower incomes) the Coalition's Low and middle-income tax rebate of up to $1,080 due to be paid from July 2019 backdated to July 2018.