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New Nationals leader Matt Canavan is proposing income splitting for couples with dependent children — allowing them to combine their total income and divide it evenly for tax purposes.
Under Canavan’s proposal, couples with dependent children could pool their total income. The ATO would then tax each partner on half of the combined amount. This mirrors systems used in France and Germany.
For example, if one parent earns $140,000 and the other earns $0, the tax would be calculated as if both earned $70,000.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.