A tax form is pictured. | Reuters Photo
A tax form is pictured. | Reuters Photo

One of the two things said to be permanent in life is set to hit Australians in the next four years. And it would be a painful and big hit, costing them $25 billion until 2018.

The culprit behind the whopping tax bill is bracket creep, the result of inflation which would hike wages but at the same time elevates them to higher tax brackets. For 2014, wages are expected to grow at 2.75 percent, while for the next three years it would expand by 3 percent annually.

With bracket creep, taxes - which keeps on getting bigger and bigger - eat a bigger share of family income.

Ben Phillips of the National Centre for Social and Economic Modelling, noted that bracket creep's complicated nature works to the government's favour, allowing treasurers not only to use it but also get away with it. The centre estimated bracket creep would affect 1.8 million Australian workers.

For 2014 alone, bracket creep would take away from the coffers of Australian families $2.4 billion via income taxes to bring the total collection to $183 billion.

A taxation review, promised by the Coalition before the September 2013 election, is forthcoming, which is an admission on the part of the government that parts of the system are not fair to Aussie taxpayers.

Treasurer Joe Hockey claimed the Coalition is a party for lower taxes and blames Labor for holding up $28 billion in savings with its alleged block of budget savings measures that would address Canberra's budget gap.

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