Easing costs of living

Tax relief on the way

From 1 July 2010 Australian workers will benefit from the next round of tax cuts, fulfilling the Government's commitment to deliver real benefits to working families. This includes lifting the low income tax offset to $1,500 to provide an effective tax free threshold of $16,000 for Australians with income up to $30,000.

Supporting small savers

Australians will receive a 50 per cent discount on up to $1,000 of interest, including interest earned on deposits, bonds, debentures and annuity products, from 1 July 2011. This will be of particular benefit to small savers,

including low and middle income earners, who are more likely to put their non‑super savings into interest‑earning deposits. Around 5.7 million depositors will benefit from this measure in 2011‑12. The Government will consult on implementation details during 2010‑11.

Housing affordability

The Government is assisting aspiring first home buyers through concessionally taxed First Home Saver Accounts. These accounts are being made more flexible by allowing money from the accounts to be paid to an approved mortgage at the end of the minimum qualifying period, if a house

is purchased in the interim. This will make it easier for first home savers to adjust their housing decisions to their changing economic circumstances.

Banking competition

The Government has taken action to support banking competition and keep competitive pressure on the big banks:

• extra boost to banking competition by phasing down interest withholding tax;
• investing $16 billion in residential mortgage‑backed securities to assist smaller lenders to raise competitively‑priced funds.