Workers will keep more of their incomes beginning on Thursday as the federal government gives out the final stage of income tax cuts on July 1.

From July 1, a worker on $50,000 will get a tax cut worth $450 a year, taking the total cuts over the three rounds to $1750. For someone on $80,000, it's an extra $300 per year and a total $1500.

Moreover, minimum wage earners will get an extra $26 a week from the Fair Work Australia award established earlier this month that lifts the minimum wage to $570 a week from $544.

Nevertheless, this will not automatically mean that consumer spending will be magnified immediately.

Macquarie Research said the impending election might trigger a more cautious retail spending.

"People may opt to save more or hold on to their extra cash as the overall sentiment is still volatile," the bank's economic research division noted.

The Federal government decided to increase the tax threshold to A$37,000 from A$35,000 and the marginal tax rate for those earning A$80,000 to A$180,000 decreasing to 37 percent from 38 percent.

At the same time, the low-income tax offset (LITO) will increase to A$1500 from A$1350, effectively lifting the tax-free threshold to A$16,000. The LITO will have doubled from A$750 since mid-2008.