Australians have paid an estimated $65.3bn more in personal income tax over four years because tax thresholds failed to keep pace with inflation, as the Coalition moves to make bracket creep a central cost-of-living battleground.
Leader of The Nationals, Matthew Canavan, said new Parliamentary Budget Office analysis estimates personal income-tax revenue was $65.3bn higher between 2022-23 and 2025-26 than it would have been if tax thresholds had been indexed to inflation.
“Labor’s inflation has become Canberra’s silent tax rise,” Senator Canavan said.
“Australians have been fighting just to keep up with higher prices, while the government has enjoyed a $65 billion windfall from bracket creep.
“A pay rise that only keeps pace with the grocery bill is not a real pay rise. Australians should not then have Canberra reach into their pocket and take an even bigger share.”
“Our Tax Back Guarantee will end this tax by stealth. We will index income-tax thresholds to inflation because if a government wants to increase your taxes, it should have to look Australians in the eye, make the case and vote for it.”
Member for Capricornia, Michelle Landry, said hardworking Australians should not be pushed backwards simply because their wages rise with inflation.
“Families across Capricornia are working hard to get ahead, but bracket creep means the tax office takes a bigger share of a pay rise that often does little more than cover higher household bills,” Ms Landry said.
“People are paying more for groceries, power, insurance and housing. When their wage increases just to keep pace with those costs, they should not be penalised with a higher tax bill as well.
“This analysis shows just how much Labor has collected through bracket creep while families are under pressure. Australians deserve a fairer system that lets them keep more of what they earn.”
The PBO analysis describes a cumulative $65.3bn difference between the existing tax system and one where personal income-tax thresholds had moved in line with CPI.
The inflation-driven tax grab has accelerated sharply, rising from $9 billion in Labor’s first full financial year in office to $23.9bn in 2025-26, an increase of more than two-and-a-half times.
In the last financial year alone, bracket creep delivered an estimated $65.5m in additional income-tax revenue every day. Across the four years, that $65.3bn windfall is equivalent to around $2,350 for every man, woman and child in Australia.
