Stage 3 tax cuts revisited: how would members have voted if they had the choice?

When the Albanese government modified the Stage 3 tax cuts in early 2024, it sparked fierce debate across Australia. The original Morrison-era policy would have flattened the tax system, while Labor's revised version redirected benefits toward middle and lower-income earners. But here's the thing: despite affecting every working Australian, ordinary citizens had no direct say in this $20 billion annual decision.

What actually happened with Stage 3

The original Stage 3 tax cuts, legislated in 2019, were designed to: - Abolish the 37% tax bracket entirely - Reduce the 32.5% rate to 30% - Create a flat 30% rate for incomes between $45,000 and $200,000

Labor's 2024 modifications instead delivered: - $804 annual tax cut for someone earning $50,000 - $1,679 annual tax cut for someone earning $80,000 - $4,529 annual tax cut for someone earning $180,000 - Retained the 37% bracket and kept more progressive tax structure

The government argued this better targeted cost-of-living relief, while critics claimed it broke an election promise. Both sides made compelling cases, but the decision ultimately rested with a handful of politicians and their advisers.

The real-world impact Australians are living with

By 2026, these tax changes are touching every household budget. A nurse earning $75,000 is taking home an extra $129 per month, while a tradie on $90,000 gets about $150 more each pay. Meanwhile, bracket creep continues affecting middle-income earners as wages rise with inflation.

But the broader questions remain unanswered: Should Australia have a flatter tax system that treats all income earners more equally? Or should higher earners contribute proportionally more to fund essential services? These aren't just technical policy questions -they reflect fundamental values about fairness, opportunity, and what kind of society we want to build.

How direct democracy would have changed everything

Imagine if Direct Democracy Australia members had been presented with the Stage 3 choice in 2024. The debate wouldn't have happened in Parliament House corridors or party room meetings. Instead, it would have unfolded in community halls, online forums, and kitchen tables across the country.

Our members would have received detailed briefings showing: - Precise dollar impacts for different income levels - Revenue implications for government services - Economic modelling on spending versus saving behaviors - International comparisons of tax progressivity

Then, after genuine deliberation and debate, they would have voted. Not based on party loyalty or political calculation, but on their assessment of what's best for Australia.

The questions politicians didn't ask

The Stage 3 debate revealed how disconnected traditional politics has become from community priorities. Neither major party seriously consulted voters about the fundamental trade-offs involved:

• Would you prefer lower taxes or better-funded public services?
• Should tax policy prioritize simplicity or progressivity?
• How do we balance immediate cost-of-living relief against long-term fiscal sustainability?
• What's the right level of redistribution in our tax system?

These are exactly the conversations Direct Democracy Australia facilitates among our members. We don't assume politicians know best -we trust Australians to make informed decisions about their own future.

Beyond Stage 3: the bigger democratic deficit

The tax cuts controversy is just one example of a deeper problem. Whether it's housing affordability, climate policy, or healthcare funding, major decisions affecting millions of Australians are made by a political class increasingly out of touch with community concerns.

Consider the numbers: 151 MPs in the House of Representatives make binding decisions for 26 million Australians. That's one decision-maker for every 172,000 people. No wonder so many Australians feel unheard.

Direct democracy offers a different path. When our elected representatives follow member instructions rather than party lines, they're accountable to the people who actually live with the consequences of policy decisions.

What this means for future tax policy

As we head toward the next election cycle, tax policy will again dominate political debate. Questions about negative gearing, capital gains tax, and bracket creep adjustments will resurface. The major parties will make promises, break promises, and claim mandates based on election victories often decided by marginal swings in a handful of seats.

Direct Democracy Australia offers something different: ongoing, informed participation in the decisions that shape our country. Our members don't just vote every three years and hope for the best. They engage continuously with policy development, bringing diverse perspectives and real-world experience to complex challenges.

Ready to have your say on tax policy and other issues affecting your future? Take our policy quiz to see how direct democracy could give you a real voice in Australian politics, or join thousands of Australians who are already shaping policy through participatory democracy.