Tax payable reduces if the rates remain constant, but the thresholds increase.

The opposite known as bracket creep, occurred for many years when inflation was higher than it is today.

From 1^st July 2009 the 30% threshold for residents and non-residents will increase.

The low threshold will increase from 34,001 to 35,001, and

The second highest marginal rate will reduce from 40% to 38%.