The National Centre for Social and Economic Modelling (NATSEM) at the University of Canberra has released their modelling of the impacts of the 2019 Budget. Specifically, they modelled the following components of the 2019 Budget:

  • One-off energy payment for certain welfare recipients in 2018-19 and 2019-20
  • Increased Low and Middle Income Tax Offset (LMITO) between 2018-19 and 2021-22
  • Low Income Tax Offset (LITO) change from 2022-23 onwards
  • Personal income tax thresholds and marginal tax rates change in 2022-23 and 2024-25

The estimation is based on NATSEM’s STINMOD+ microsimulation model, where they simulate the impact of the policy change on households based on the latest ABS Survey of Income and Housing (SIH).

The centre finds that the new measures in the budget:

  • Favour middle and mid-high income families before 2020-21 due to the income requirement of the LMITO.
  • Favour mid-high income earners from 2022-23 onwards due to the reduced tax rate at mid- and high- thresholds.
  • Benefit some of the low and middle-income families through the LITO and LMITO, although the gain is lower in dollar terms compared with the high-income earners.
  • By the end of 2024-25, the greatest benefits go to those in the federal election districts of Wentworth, North Sydney, Warringah, Sydney and Grayndler while those in the area of Spence, Hinkler, Lyne, Lyons and Page benefit the least.

The policy note is available here.

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