MUM and dad investors will receive generous concessions to park their savings with banks and building societies as part of sweeping tax reforms.
The Rudd Government is preparing to unveil a new savings scheme offering tax breaks similar to superannuation’s discount rate of 15 per cent, The Daily Telegraph reports.
It will encourage investors to deposit savings with the four major banks and other respected financial institutions.
But investors will have to “lock up” their savings — perhaps for between five and 10 years — to qualify for the special rate.
The new savings deal will be announced as part of the Government’s much-anticipated response to the Henry tax review.
It will be part of a suite of measures aimed at building a new savings culture in Australia.
But it is also hoped it will generate billions of dollars in bank deposits, cutting the need for finance houses to borrow from overseas.
The Government expects it will be popular with voters who currently face punishing tax rates on savings. Some taxpayers can pay up to 50 per cent on interest earned from their bank deposits.
Australia is one of the few countries in the world to tax bank savings at the full rate.
Among key reforms, taxpayers will be able to lodge their annual tax returns with a few clicks of a mouse.
And Australia’s antiquated tax system — containing 125 different taxes — will be streamlined to simplify arrangements.
It is understood the Reserve Bank and other financial authorities have raised concerns about the steady decline in deposits.
Bank CEOs have been lobbying Canberra for changes to taxation on ordinary bank deposits, claiming the superannuation industry gets a huge advantage.
And they have a strong ally in Treasury boss Dr Ken Henry, who has also raised concerns over the punitive rates faced by those who save with banks.
Source : www.news.com.au
Skilled health professionals in the west of the UK are being given the chance to find out about a new life in Australia at the Down Under Live event in Cardiff. on the 11th July. 
All the latest NEWS from Perth 
Australian share market opens higher
Posted in Political News, tagged $1.15 billion, $16.01, $20.48, $22.00 Westpac up 10 cents, $34.26, $36.40, $65.46, (AEST), 0.23 per cent, 0.31 per cent, 0.60 per cent, 10.15am, 12.1 points, 14 cents, 15 per cent, 20 cents, 3889.3, 4.41 per cent, 4cents, 50.34 points, 8.7 points, ANZ, asess, Average, banks, Ben Bernanke, benchmark, BHP, broader, capital, cash, cash return, comments, Commonwealth Bank, contracts., deficit., down, earnings, efforts, equity, Exchange, Federal Budget, Federal Reserve chairman, firms, five cents, four, gained, gains, generating, higher, Industrial, investors, long rally, lost, lower, lucky, major, March, marginally, Mining giant, mixed finish, mixed lead, morning trade, mulled, NAB, new, open, opened, opening, Ordinaries, over, paused, points higher, Political News, quarter, raise, reassuring, reported, Resources, Rio Tinto, rival, S&P/ASX200, settle, share market, share price index contract, stronger, Sydney Futures, The Dow Jones, to 3872.3., Tuesday, up, US trade, volume, Wall Street, was up, wobbled on May 13, 2009| Leave a Comment »
At 10.15am (AEST), the benchmark S&P/ASX200 was up 12.1 points, or 0.31 per cent, at 3889.3, while the broader All Ordinaries gained 8.7 points, or 0.23 per cent, to 3872.3.
The four major banks were mostly higher at the open.
ANZ gained 4cents to $16.01, NAB was up 14 cents at $22.00 and Westpac was up 10 cents at $20.48.
The Commonwealth Bank, which reported cash earnings for the March quarter of about $1.15 billion, generating a cash return on equity of over 15 per cent, was down 20 cents at $36.40.
Resources weren’t as lucky, opening lower in morning trade.
Mining giant BHP was down five cents at $34.26, while rival Rio Tinto lost 4.41 per cent to $65.46.
Wall Street wobbled to a mixed finish on Tuesday as investors paused to assess gains from a long rally and mulled the new efforts to raise capital by banks and other firms.
The markets also digested better-than-expected data on the US trade deficit and reassuring comments from Federal Reserve chairman, Ben Bernanke, about the health of the banking system.
The Dow Jones Industrial Average was up 50.34 points, or 0.60 per cent, to settle at 8,469.11.
The tech-dominated Nasdaq dropped 15.32 points, or 0.88 per cent, to 1715.92 while the broad-market Standard & Poor’s 500 index lost 0.89 point, or 0.1 per cent, to settle at 908.35.
On the Sydney Futures Exchange, the June share price index contract was trading 17 points higher at 3885 on volume of 4900 contracts.
www.news.com.au
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