With the economy again opening up post Covid-19 disruptions, a 2022 election looming and the threat of inflation all on our heels, a repair of the budget is in order, with a focus on who pays the bills and who owns the assets.
The latest data from the ATO comes from the FY 2019, as many returns are not lodged on time. It reveals some interesting surprises.
Out of every 100 Australians, we find that:
- 10 are from Generation Z (born from 1996 to 2009)
- 35 are from Generation Y (born from 1980 to 1995)
- 31 are from Generation X (born from 1965 to 1979)
- 19 are from Baby Boomers (born from 1946 to 1964)
- 4 are from the Silent Generation (1945 or earlier).
To put this into perspective, 75% of taxes are lodged by those younger than Boomers.
80% received a tax return, 13% owed tax and 7% were balanced.
15 out of each 100 Australians surveyed earned rental income with the majority of these (9), receiving a rental loss for the year.
Paying Tax
In a fair society with a progressive tax system, the wealthy are taxed and this money is put towards welfare payments for the less wealthy.
In Australia, the upper 3.5% of earners pay almost ⅓ of personal taxes. The vast majority of earners, about 40% of Australians, also contribute nearly ⅓ again as a group. Those who earn $18,000 or less make almost no net contribution to the government as any taxes they are paid are given back in the form of welfare payments.
Property
Most household wealth is held in property. Over 2.2 million Australians currently own investment property and over 20,000 own 6 or more rental properties.
Of these 2.2 million Australians, 60% claimed a net loss, which is charged against their other personal income rather than treated as a business loss and carried forward to the next year.
Income
$62,549 was the average taxable income for FY2019. The median, which is a more accurate description that isn’t skewed by the few high income earners, was $47492.
Superannuation and SMSFs
Most people do not have very much in their superannuation. The median is less than $50,000, increasing with age where those over 65 have an average of $200,000. This will not finance a decent retirement on its own, so assets are hopefully in the mix.
SMSF members are generally older, but by no means are more wealthy. A quarter earn less than $20,000. But this is because super funds pay tax and therefore is not moved into personal, taxable income. Someone may hold millions in funds but have little in the way of personal income.
Get in touch with your Accountant at YBM to get help with your taxes and business today.