The average Australian worker will be paying more tax in the coming decade thanks to bracket creep, despite Labor’s stage three tax cut changes, a Treasury official has conceded.

Dr Louise Rawlings, the first assistant secretary of Treasury’s tax analysis division, told a Senate economics committee an Australian earning an average salary of $80,200 will shell out a higher proportion of their income in tax — or about 3 per cent more — by 2035-36.

They would go from paying 20.6 per cent of their income in tax in 2025-26 to 23.6 per cent within a decade. Pay levels would naturally rise to keep up with inflation, pushing workers on to higher tax brackets.

This is despite Labor’s re-jigged stage three tax cuts giving the average worker an extra $268 in 2026-27 and $536 extra a year by 2027-2

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