Highlights
On 11 May 2010 Treasurer Wayne Swan delivered his third Federal budget. There are a number of announcements of which customers should be aware.
The announcements in this update are proposals unless it is stated otherwise. These alterations need to successfully pass through parliament before becoming law and may be subject to further changes during this process.
| Tax interest discount |
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1 July 2011 Tax payers can claim a new 50% discount of up to $1,000 of interest earned, including deposits held with any bank, building society or credit union as well as bonds, debentures or annuity products. |
| Standard tax deduction |
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1 July 2012 Taxpayers can claim an optional standard deduction of $500 instead of claming work-related expenses and the cost of managing tax affairs. The deduction increases to $1,000 from 1 July 2013. |
| Tax cuts |
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1 July 2010 The Government recommitted to the already legislated marginal tax rates for 2010/11. There are two key changes from 2009/10.
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| Senior Australians Tax Offset |
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The increase in the low income tax offset ensures that recipients of the Senior Australians tax offset can earn more before paying tax. Taxable income that can be earned by these individuals before paying tax or the Medicare Levy is as follows: 2009/10: Single $29,867; Couple (each) $25,680 |
| Medicare levy low income thresholds |
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The Medicare levy thresholds are proposed to change for low income earners and pensioners of less than age pension age. The Medicare levy is based on taxable income (excluding any lump sum super payments counting towards the low rate cap). The Medicare levy will not be payable until the income thresholds are breached. |
| Childcare rebate |
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1 July 2010 Eligible individuals can get a Child Care Rebate covering 50% of out of pocket child care expenses for approved child care up to a maximum annual cap (currently $7,778). From 1 July 2010, the annual threshold will be returned to the 2008/09 level of $7,500 and the indexation of this threshold will be paused for 4 years. |
| Government co-contribution |
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11 July 2010 The Government will permanently retain the current co-contribution rate for eligible personal non-concessional contributions up to $1,000. The rate will remain at 100% and will no longer increase in subsequent years as announced in the 2009/10 Federal Budget. |
| Family tax benefit changes |
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1 July 2010 Proposed changes will allow Family Tax Benefits to be paid where recipients don't have a Family Tax Benefit debt or where ceasing payments would cause undue hardship. To remain eligible, Family Tax Benefit Part A, families with children aged 16-20 who do not have a Year 12 or equivalent qualification must participate in full-time education or training, or part-time education or training in combination with other approved activities, leading to a Year 12 or equivalent qualification. Proposed changes will require the participation in education or training to be full-time to remain eligible. |
For more information about these and other changes, please read the 2010/11 Federal Budget (PDF 220kB). Or, for a more in-depth view refer to the ANZ Federal Budget Report prepared by ANZ Economics & Markets Research.
If you would like to find out how the proposed changes may impact you or to make an appointment with an ANZ Financial Planner click to call below or complete an appointment form. Or if you want limited financial advice click to call below and ask to speak to a representative from the ANZ My Advice team.
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