Tax Back Guarantee

The Coalition will introduce a new Tax Back Guarantee.

This will index tax thresholds to inflation, so you keep more of what you earn.

Even before the conflict in Iran, Australia’s inflation was higher than any major advanced economy.

This means higher grocery prices and power bills.

But inflation also means more tax.

Currently, when your pay goes up with inflation, you are pushed higher into higher tax brackets.

This is called “bracket creep”. It means the Government takes more tax every year, without needing to change the law.

The Coalition will fix this by indexing income tax thresholds to inflation, so Australians are not taxed more simply because prices have gone up.

From 2028-29, a Coalition government will index the bottom two income tax thresholds to inflation.

This will fully protect around 85 per cent of income earners, delivering relief of around $250 in the first year and more than $1,000 a year by year four.

From 2031-32, the Coalition will also index the top two thresholds, fully protecting all taxpayers from inflation.

This is real tax reform that is fair, simple and honest.

It will force governments to respect your money. It will mean no more secret tax rises through inflation.