Most Australians want Stage 3 scrapped or overhauled

The Australia Institute

Media release | Thursday 26 October 2023

More than two-thirds of Australians want the government to overhaul Stage 3 tax cuts or scrap them altogether, according to new research from the Australia Institute.

When asked whether the government should repeal the Stage 3 cuts, 37% support the idea and 24% oppose it. A significant number of people – 39% – remain unsure or don’t know.

When informed about details of the cuts, that they will “cost the budget $313 billion over the next ten years and will mostly benefit high income earners”, only 17% supported retaining them, with 25% in favour of scrapping them and 44% thinking they should be restructured to give more benefit to middle and low-income earners.

Key results:

The Australia Institute surveyed a sample of 1,600 Australians about their attitudes to Stage 3, and whether the federal government’s tax and spending policies should be more like those of other countries.

  • The most popular option across all age groups, genders and voting intentions, including Coalition voters, was to restructure the tax cuts so middle and low-income earners received more.

  • Respondents were also asked whether they supported Australian government policies to take a Nordic approach to taxation, with more tax collected for greater funding of public services, or that of the US, which collects less revenue and spends less on public services.

  • More than two in five (43%) Australians would prefer a Nordic approach to taxation while just 13% support an American approach.

  • Across the political spectrum, voters preferred Nordic-style policies over a US approach.

  • Voters aged between 18 and 29 favoured the Nordic approach (49%), followed by the 60-plus cohort (45%).

“Our research puts to bed any notion that the majority of Australians want the Stage 3 tax cuts to go ahead in their current form,” said Greg Jericho, Chief Economist at the Australia Institute.

“Nine months out from them coming into effect, there is no meaningful constituency for Stage 3, and with good reason. They are the most expensive and inequitable tax cuts in Australia’s history.

“The federal government now has firm backing from voters across the political spectrum to either scrap Stage 3 outright or restructure to restructure then to benefit middle and low-income earners instead of the top 10 per cent.

“The Australia Institute’s Stage 3 Better report highlights four pathways for the government to restructure the Stage 3 tax cuts.

“Each alternative costs less than the current proposal, provides more money to those most affected by bracket creep and rising inflation, and gives the government the ability to deliver tax cuts, improve services and raise income support for payments such as Jobseeker. “Australians clearly want a fairer and more progressive approach to taxation, one which is equitable, sustainable and ensures proper funding for public services.

“Our research shows the majority of Australians are in favour of taxing more to spend more on public services, as we see in Nordic countries (43% support) rather than taxing less and spending less on public services, like the United States (13% support).”

/Public Release.