As we mentioned yesterday, the Federal Government released their budget last night so instead of going through the reams of data coming out of the budget line by line and boring you to death, I thought I’d provide a very (sky) high summary of some of the key points which may be of interest to folks looking to one day call Australia their new home
The Federal Government has estimated Australia’s deficit will increase to $58 billion in 2009-10 and reach a total of $219 billion in the five years to 2012-13, due to a combination of reduced economic growth, decreased tax revenues, and initiatives to stimulate the economy.
The Government has predicted the Australian economy will contract by 0.5% in the 2009-10 financial year, but will be growing again by 2010-11.
To return the Federal budget to surplus in the medium to longer term, the Government is relying on a combination of strong economic growth from 2011-12 (which will increase revenues from taxes) and decreased spending, for e.g. by reducing family tax benefits, introducing means testing for the health insurance rebate and capping tax concessions for salary sacrificed super contributions.
â€œThis budget offers a number of opportunities for our business, as Australians reconsider their investment strategies as a result of changes to tax and superannuation, and businesses try to take advantage of tax cuts for capital expenditure, and increased spending on research and infrastructure projects,â€ said Chief Economist Alan Langford.
A summary of some of the budget’s initiatives are below.
â€¢ From 1 July, tax concessions for salary sacrified and employer paid superannuation contributions will apply to a reduced amount of the first $25,000 contributed.
â€¢ For those over 50, concessions will apply to the first $50,000 of salary sacrified and employer paid superannuation contributions until 2012-13, and after that date the level will reduce to the first $25,000.
â€¢ The age pension won’t be paid until aged 67, for those under the age of 55.
Tax cuts for small business
â€¢ Tax concessions for businesses investing in assets, such as machinery, computer hardware and work vehicles.
First home owners grant
â€¢ The $21,000 First Home Owners Grant has been extended until September, and will then be halved until the end of December, when it will revert to $7,000.
Infrastructure and research spending
â€¢ $8.5 billion will be spent on roads, metropolitan railways and ports.
â€¢ Tax concessions for businesses investing in research initiatives.