Budget 2008 - 2009
2008-09 Budget Changes
By Wealthyfrog www.wealthyfrog.com.au
Proposed Personal Tax Cuts
The Government aims to deliver on the tax cuts that were promised in the 2007 election campaign, including deferring previously budgeted reductions in the top marginal tax rate for taxpayers on incomes of more than $180,000 per annum until beyond 2010-11.
Table 1 shows what the personal income tax rates will be:
Increase in Child Care Tax Rebate
The Government will increase the Child Care Tax Rebate (CCTR) from 30 percent to 50 percent at a cost of $1.6 billion over four years. This will ensure that, in addition to any Child Care Benefit payable, half of a family's total out-of-pocket child care costs will be met every year.
The cap on the amount that can be paid each year will also be lifted from the current amount of $4,354 to $7,500 per child.
The Government will also pay the 50 percent CCTR every three months, instead of once a year, providing support closer to when the bills come in.
Family Tax Benefit Changes
The Family Tax Benefit (FTB) Part B, Baby Bonus and Child Care Benefit (CCB) are currently available to families with high incomes. The Government will make these payments fairer by targeting them better, to where they are needed most.
On 1 July 2008, the Baby Bonus will be increased to $5,000 and indexed annually.
From 1 January 2009, the Baby Bonus will be:
Helping first home buyers
Saving for a deposit is a major barrier to buying a first home.
The Government will provide $1.2 billion over four years in the Budget to assist first home buyers to save for a home.
Enhanced First Home Saver Accounts will provide a simple, tax effective way for Australians to save for their first home. The Government will provide people saving for a first home with direct contributions into the accounts and only tax earnings in the account at a low rate. The first $5,000 of individual contributions to these accounts each year will now attract a 17 percent Government contribution, providing more assistance to average income earners.
Earnings will be taxed at a low rate of 15 percent. Withdrawals from the account will be tax free when used to buy or build a first home.
Helping renters and boosting housing supply
The Government is committing $623 million over four years to the National Rental Affordability Scheme to encourage the construction of affordable rental housing.
The Scheme will provide investors with $8,000 annually for ten years for each new dwelling that is rented out to low income tenants at least 20 percent below the market rate.
The Housing Affordability Fund will help improve housing supply and reduce costs to home buyers by cutting red tape and reducing the costs of providing new housing-related infrastructure, at a cost of $500 million over five years.
Up to $30 million of the Fund has been committed to rolling out the Electronic Development Assessment project to speed up planning approval processes.
In addition, the Government will identify surplus Commonwealth land that could be used for new housing.
The Government will also establish a National Housing Supply Council, which will assess the adequacy of housing supply over the next 20 years.
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