Australia has shown very positive growth in the investment property sector in recent years, both for residents and foreigners (until recently introduced legislation). We bring you the highlights of Australia’s budget announced earlier today to show what is happening in a developed economy that for all intents and purposes, is fast outgrowing everyone else in the midst of a global recession.
Initiatives for small business
Reduction of corporate tax from 30 percent down to 28 percent. Immediate write off for assets costing less than 5,000 AUD
Introduction of a standard deduction clause for taxpayers that will allow taxpayers to deduct 500 AUD of work related and tax agent expenses from 2012-13. The allowance rising to 1,000 AUD from 2013-14.
General public implications
The third stage of tax cuts promised in the 2007 election campaign. The 30 percent tax rate level has been raised for all taxpayers from 35,000 AUD to 37,000 AUD saving the average taxpayer 200 AUD a year.
50 percent tax discount on the first 1,000 AUD of interest earned on deposits, bonds, debentures and annuity products
General business implications
125.2 million AUD to be spent over the next eight years to create a single national online registration system for business names and Australian Business Numbers, meaning businesses will no longer need to be registered in each State and Territory.
Phasing down the interest withholding tax rate on interest paid on offshore borrowing to encourage foreign institutions into the market.
The ATO (Australian Tax Office) will be given 445 million AUD to crack down on GST compliance (Goods and Sales Tax). As a result, it expects to reap some 3.2 billion AUD in unpaid taxes
State of Australia’s economy in general
The Budget will be back in the black three years earlier than expected thanks to Australia's rapidly recovering economy. While the fiscal deficit in 2010-11 is expected to be 39.6 billion AUD, an increase in Government tax receipts should see the Budget return to a 2 billion AUD surplus in 2012-13.
The Government has forecast the economy will grow by 3.25 percent in 2010-11 before increasing further to 4 percent in 2011-12.
Treasury says unemployment peaked at 5.8 percent last year and will now fall to 4.75 percent over the next four years, indicating that Australia is close to full employment.
- Tuesday 11 May 2010