2010 Federal Budget Highlights
Key points on Super
- Permanent reduction to Government Co-contribution
- Minimum pension reduction NOT extended
- Super changes announced in response to Henry Report
Key points on Taxation
- Reductions in Personal Income Tax
- Reductions in Personal Income Tax – Senior Australians
- Increase in the Medicare levy low income thresholds
- Standard tax deductions
- 50% discount on up to $1,000 interest income
- Increase in the net medical expense tax offset claim threshold
- Senior Australians Tax Offset
Overview
As Treasurer Swan and PM Rudd have been constantly stating over the past week, the Federal Budget handed down last night had, from a financial services perspective, few surprises and few new measures announced.
For a pre-election Budget you could even call it “no-frills” or austere with Swan stating that all new spending measures were to be offset by new savings measures and that spending was capped at 2% growth. The Government certainly wants to be seen as responsible economic managers going into the next election.
Unsurprisingly, the Government re-affirmed the changes announced a week ago in their “A Tax Plan for our Future” (or their response to the Henry Report).
There were few new super measures (other than those announced last week) with last year’s reduction in the co-contribution made permanent and some minor amendments to clarify current legislation. A new savings measure to reduce income tax payable on interest bearing accounts was announced to encourage personal savings. This measure specifically targets lower income earners and older Australians.
We have outlined those measures that have most impact on your savings, investment and taxation situation. If you have any questions regarding how these changes will impact your personal circumstances, you should speak to your FMD Financial Planner. Click on the link below to read the 2010 Federal Budget Highlights.