Australian workers earning less than $16,000 will not have to pay income tax from 1 July 2010 following changes announced in the 2010 Federal Budget.
Treasurer Wayne Swan said the change, which increases the non-tax paying threshold from 11,000 would provide a real benefit to low income and part-time workers.
Also from 1 July 2010:
• The Low Income Tax Offset will increase from $1,350 to $1,500
• The 30 per cent threshold will increase from $35,000 to $37,000
• The 38 per cent marginal tax rate will decrease to 37 per cent
The Budget also delivered good news for small businesses, who Swan described as the backbone of the Australian economy.
In a move that will boost growth prospects, Treasurer Wayne Swan announced that small businesses, which employ around half of all private sector workers, will benefit from an increased tax break for eligible assets ordered between December 2008 and December 2009.
The Small Business and General Business Tax Break will increase to 50 per cent for eligible assets.
Moreover, up to 720,000 small businesses will receive a two-year head start on the full two percentage point reduction of company tax from 30 per cent to 28 per cent at a cost to the Government of $550 million, while bigger business will have to wait for a phased reduction to 29 per cent in 2013-14 and 28 per cent in 2014-15.
Peter Anderson, chief executive at the Australian Chamber of Commerce and Industry, commented: “While there are no specific further tax initiatives for business in the budget, we hold the view that tax reform is an unfinished business especially in relation to the Henry Tax Review’s proposal to abolish payroll tax, provide further capital gains tax relief and the need for continued reduction in income tax.”