Tuesday 15 September 2026

Australians have paid an estimated $65.3bn more in personal income tax over four years because tax thresholds failed to keep pace with inflation, while someone on a $70,000 salary per annum has paid almost $5,000 more in ‘inflation tax’, The Nationals say as they make bracket creep a central cost-of-living battleground.

Member for Mallee Dr Anne Webster MP 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.  In the most recent year alone, the lack of bracket creep relief cost someone on $70,000 salary $1,730.

“Labor’s inflation has become Canberra’s silent tax rise,” Dr Webster said.

“Australians have been fighting without thousands of dollars’ income trying 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. Canberra should not reach into Australians’ pockets and take an even bigger share. That’s how real wages are falling backwards under Labor.”

“The Coalition’s 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.”

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.

‍

Below – ​​​​​​​background figures and basis for $70,000 income estimate on tax paid due to bracket creep

‍