New tax cuts from today

New tax relief, that becomes effective today, will boost incentives for hard work, according to the Federal government.

The Federal Treasurer, Wayne Swan, who made the announcement,  with his assistant, Nick Sherry, said the new tax cuts would also help boost the Australian economy, which has been hit hard by the global economic crisis.

They said it is being directed, particularly, to people on low and middle incomes.

“This will  help stimulate economic activity, supporting Australian business and jobs, in the face of the worst global recession in 75 years,” the two ministers said.

So what relief, precisely, is the government offering?

Well, the government says there will be substantial increases in the low income tax offset.

This will rise from $1,200 to $1,350.

• So the effective tax free threshold,  for people who are  eligible for the full offset, will rise from $14,000 to $15,000.
• The 30 per cent marginal tax rate threshold will rise from $34,001 to $35,001 and
• The 40 per cent marginal tax rate will be reduced to 38 per cent.
• The amount someone eligible for the senior Australian tax offset can earn, before needing to pay tax, will also rise.
• For singles, it will increase from$28,867 to $29,867 and
• For each member of a couple, it will rise from $24,680 to $24,680

The two minister said :-

• A person earning $20,000 will get a 56 per cent tax cut
• Another on $50,000 will get a cut of about 18 per cent and
• Someone earning $80,000 will get an 8 per cent cut.

There will also be increases in education allowances, the baby bonus and child care benefits.

See the full statement on www.treasurer,gov.au