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:

Superannuation

As previously announced in the government’s response to the Henry tax review, the budget confirms the following superannuation changes: