This is the advertisement that is being prominently displayed around the country (at great expense to the taxpayer) relating to the tax cuts that become effective from 1st July 2012 to offset the impact of the carbon tax.
This ad should be accompanied by the sort of warning you would expect to find on your car side mirrors "Tax Cuts are smaller than they appear".
Our issue lies with the assertion in the ad that the tax free threshold is tripling to $18,200. This leaves the reader with the feeling that they are about to receive a very generous tax cut and fails to state that the current effective tax free threshold is currently $16,000 when the low income rebate is considered.
The Government goes to great lengths with retailers to ensure that prices must be expressed as a dollar figure per litre of drink, or per tissue etc. Financial services providers must disclose in dollar terms as well, rather than using percentages as apparently studies suggest that more than half of Australians do not understand how to calculate them (note I did not use the term 50%).
Despite the Government insisting that business openly disclose facts in a manner that the average member of the public can understand, there appears to be a double standard when it comes to Government advertising.
The reality of the July 2012 tax cuts is that an average Australian taxpayer earning less than $80,000pa receives a tax cut of around $300 when all of the various changes to the tax free threshold, marginal rates and rebates are considered. Refer our previous blog article on what the tax cuts mean for you at http://staging.gemcapital.com.au/blog/carbon-tax-tax-changes-and-what-it-means-to-you-from-1st-july-2012
But then I don't suppose that a $300 tax cut sounds anywhere near as good as tripling the tax free threshold.
There shouldn't be a rule for us and a separate rule for the Government and the Unions when it comes to advertising