There’s a sneaky way taxes are creeping up. But that might be OK

May 29, 2026 — 6:00am

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I’m not going to lie. For as long as I’ve known about “bracket creep”, I’ve said we should get rid of it. Why should the government get to rake in more tax from us every year – and then make out like they’re so generous when they give us a tax cut to make up for it?

As you may know, “bracket creep” refers to when your income rises (often somewhat in line with inflation), pushing you into a higher tax bracket.

Now, if your salary increases, it might seem like it’s fair to pay a bit more tax on that extra amount you’re earning. But the problem is, if your pay packet is only rising at the same rate – or even below – the growth in prices, then you’re not really any better off: your higher income buys the same – or an even smaller – number of things than last year.

Yet, because the income tax brackets stay the same (unless the government decides to change them), you might find a bigger share of your income ends up in a higher tax bracket, increasing the average rate of tax you pay on your income.

Paying higher tax, and being no richer in “real” terms (that is, accounting for inflation)? That sounds like a stitch-up, doesn’t it?

And then, come election time, the politicians fighting for your vote can make it sound like they’re being ever so generous by promising a tax cut … which only really makes up for the fact that a lot of us might have been bumped up into a higher tax bracket.

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So, when people like Opposition Leader Angus Taylor promise to lock income tax brackets to inflation (that is, making it so that the tax brackets rise every year in line with the growth of prices), it seems like a very sensible – even great – idea.

In fact, when former opposition leader Peter........

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