Young Australians are paying significantly more tax than older generations, even when earning the same income.
This disparity stems from Australia’s tax system, which increasingly relies on income tax—primarily impacting working-age individuals.
On Monday morning’s episode of The Briefing, we talked to Independent MP Allegra Spender. She has highlighted the issue in a green paper developed over a year in collaboration with experts, unions, and business leaders.
Independent MP Allegra Spender on why young Australians pay so much tax
The paper reveals that older households with an annual income of $100,000 pay less than half the tax of younger households earning the same amount.
High-income retirees also benefit from lower tax rates compared to their younger counterparts, largely due to tax-efficient superannuation and investment income advantages.
“What we’re seeing at the moment is young people aren’t meeting the financial milestones that previous generations did. That’s really a problem, and it’s a problem not just for younger Australians, it’s a problem for all of us,” Ms Spender said.
Younger Australians are finding it harder to achieve financial milestones like home ownership or starting families.
With Millennials and Gen Z set to outnumber Baby Boomers at the next federal election, there may finally be a political opportunity to reform the tax system.
Ms Spender advocates for changes to create a fairer system, ensuring future generations have the same opportunities.
“That’s why I’m in politics to change things…this is not about my personal circumstances. This is me about saying, do you make this work for everyone? And I don’t think it is working for people. And that’s why I want to change it.”
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