Tuesday, January 15, 2013

Salaries and taxes in Australia

I quoted the anecdote of my nephew who expects to get a job as an engineer in Australia with a starting salary of A$60,000. This is a good salary, which actually surprised me. 

A few people argued criticized me for not mentioning the high tax rate in Australia and claimed that the after tax, the salary in Australia is lower. I do not understand why some people have to make these type of statements that showed their immaturity.

My nephew did tell me that he had to pay a tax of about 20%, leaving him with a net pay close that is more than adequate to meet the cost of living. As an engineer, he would be earning more than other trades, due to his special skills.

He does not mind paying a tax of 20%. He has benefited from the system of high taxation. He did received a monthly allowance of A$1,000 from the Government while being an undergraduate for several years. This relieved his parents of the financial burden of paying his living expenses as a student.

The Government gave him a study loan to meet his university fees. He has to pay back the study loan, at his own time, at an interest rate that is pegged to inflation, currently at around 2% per annum.

He said that the lower income families and unemployed people also get an allowance from the Government to meet the cost of living.

He is happy to pay a higher rate of tax, because he knows that he will also be entitled to welfare, when he loses a job. He knows that some people are not able to get a job, not due to laziness but to other reasons.

He also pointed out that there is a minimum wage, which is quite high, so that after tax, the net pay is still quite adequate for most people. He was surprised to learn about how low the hourly rates in Singapore are, compared to Australia. He asked how these people can afford to live on the low wages.

My nephew did not criticize the system in Singapore. He did ask some questions, in a polite way. Although he was not convinced with the answers, he did not show any disrespect. He showed a mature attitude.

1 comment:

  1. I find it disturbing the Pro Alien Party distrusts its own citizens. No unemployment benefits for fear people will take advantage of it.

    Msia trusts it own citizens. Lee Chong Wei won a silver & repays the country by donating part of his winnings & opening badminton school to teach/train the future generations.

    A basic level of safety net is good. It encourages people to take risks.

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