At 7:30pm tonight, Wayne Swan delivered his 3rd budget with a forecast budget deficit of $40.8 Billion for 2010-11.
 2010 Federal Budget
At 7:30pm tonight, Wayne Swan delivered his 3rd budget with a forecast budget deficit of $40.8 Billion for 2010-11. The objective of this budget is to emphasise responsible management. The budget is forecast to return to a $1 Billion surplus in 2012-13, making Australia the best performing advanced economy in the world. In addition to this, unemployment is expected to reduce to 4.75% in 2011-12, and GDP is expected to grow to 4% in 2011-12.
Most of the tax related items in the budget confirm changes that were previously announced, however, the government did announce some tax benefits in the form of reduced tax on interest income and a standard work related expense deduction for individuals resulting in simplified tax returns.
Individual Income Tax Rates
Previously announced changes to individual income tax rates have been confirmed as follows:
|
2009/2010
|
2010/2011
|
|
Tax rate (%)
|
Income level
|
Tax rate (%)
|
Income level
|
|
0
|
0 - 6,000
|
0
|
0 - 6,000
|
|
15
|
6,001 - 35,000
|
15
|
6,001 - 37,000
|
|
30
|
35,001- 80,000
|
30
|
37,001 - 80,000
|
|
38
|
80,001 - 180,000
|
37
|
80,001 - 180,000
|
|
45
|
180,001+
|
45
|
180,001+
|
From 1 July 2010 the low income earner tax offset will increase to $1,500 so individuals who earn less than $30,000 per year will have a tax free threshold of $16,000.
Savings Discount
From 1 July 2011 a 50% tax discount on the first $1,000 of interest income earned will be introduced to assist people in increasing their savings.
Simplified Tax Returns
From 1 July 2012 the government will introduce a standard work related expense deduction of $500 to assist in simplifying the tax return preparation process for individuals. This deduction will increase to $1,000 from 1 July 2013.
Business Tax Benefits
As previously announced in the government's response to the Henry tax review, the budget confirms the following:
- The company tax rate will be reduced to 29% in 2013-14 and to 28% in 2014-15. The reduction to 28% will be accelerated for small businesses to 2012-13.
- Small businesses will be entitled to claim an immediate deduction for assets costing less than $5,000. The current threshold is $1,000.
- The superannuation guarantee will increase from 9% to 12% from 1 July 2013 until 2019-20.
Superannuation
As previously announced in the government's response to the Henry tax review, the budget confirms the following superannuation changes:
- The government will pay up to $500 into superannuation annually for people earning under $37,000 per year.
- The concessional contributions cap for people aged over 50, with less than $500,000 in superannuation, will be increased from $25,000 to $50,000 from 2012, as it is currently set to reduce from $50,000 to $25,000 from 2012.
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