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Key highlights are:
- Discounted tax treatment for first $1,000 of interest earned on deposits
- Changes to deductible rate for capital protected borrowings
- Standard deduction for work-related expenses to simplify tax return process
- Restatement of measures announced in response to Henry Tax Review
Watch Westpac Chief Economist Bill Evans speaking shortly after the Budget was released:
Updated 11 May 2010
Overview
On 11 May 2010, the Federal Government handed down its Budget for 2010/11.
From a financial planning perspective, a “sound”, well-formed personal budget has few surprises. Perhaps, in this year’s Federal Budget, this is what the Government has delivered.
There was little in the way of pre-election sweeteners, other than some concessional tax treatment for certain non-super investments and proposed simplification of the tax return process through standard deductions being available for most working Australians. These changes however will not come into effect until after the next election, indicating that they would form part of the Government’s election plans.
The sweetener may actually be in the lack of “benefits”. With a greater emphasis on saving and by not continuing with the fiscal stimulus levels of previous years, there may be a reduced need for future interest rate rises – something that would actually benefit many Australians.
Certainly, there were no major surprises, with many of the major changes being announced in the Government’s response on 2 May 2010 to Australia’s Future Tax System (commonly referred to as the Henry Tax Review). It must also be noted that most measures will still need legislation to be introduced, so the final version of the changes may differ to the announcements made in the Budget.
Read this full review prepared by Westpac Economics:
Things you should know
- This publication has been compiled by Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714 (Westpac) and is current as at time of preparation 12 May 2010. Westpac Financial Planners are representatives of Westpac Banking Corporation ABN 33 007 457 141 AFSL 233714.
- Material contained in this publication is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The information in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. While the information contained in this publication is based on information obtained from sources believed to be reliable, it has not been independently verified. To the maximum extent permitted by law: (a) no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up-to-date or fit for any purpose; and (b) neither Westpac, nor any of its related bodies corporate, is in any way liable to you (including for negligence) in respect of any reliance upon such information. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication.
- It is important to note that the policies outlined in this publication are yet to be passed as legislation and therefore may be subject to change or further refinement. The taxation position described in this Federal Budget update 2010 is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation. Your individual situation may differ and you should consult a registered tax agent for specific tax advice on your circumstances.
