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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

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Sprinklers will be permanently switched off during winter from next year after the State Government today to retain this year’s trial sprinkler ban.

Yesterday’s decision follows a two-month trial ban during July and August, which Water Minister Graham Jacobs said saved about 2.2 billion litres of water, equivalent to filling 880 Olympic-sized pools and enough to supply towns the size of Manjimup or Collie for a year.

The permanent ban will apply from June 1 to August 31.

 The trial ban – for most scheme users south of Kalbarri – was introduced after water usage earlier this winter was running at 800 million litres a day, 300 million litres above average.

Dr Jacobs said today that the ban saved 50 million litres a day, while an independent survey last month indicated 93 per cent of residents supported the move.

“This is an outstanding community achievement because while there has been reasonably consistent rain, we are still well below the long-term annual rainfall average,” Dr Jacobs said

Dams were now at 45.5 per cent of capacity, their second-highest level this decade. They are holding 19 per cent more water than the same time last year.

Water Corporation figures show rainfall in all but one of the catchments for dams supplying Perth are below their historical averages for the year-to-date.

Dr Jacobs said the exact area of the permanent ban, and any adverse impact for industry and local government users would still have to be worked out.

This would occur “soon”, and some areas that took part in the trial ban – which ran from Kalbarri to Esperance and east to Kalgoorlie-Boulder – could have a case to be excluded.

These users were asked to voluntarily stop using bores during the two-month ban period, while garden bore users were allowed to turn them on for maintenance reasons.

“A lot of people say garden bores are not pulling on the scheme, but we all realise our underground water resources are all related,” Dr Jacobs said last month.

Source  :  www.watoday.com.au

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Initial work at the Chevron-led Gorgon gas project could begin before Christmas if final investment is approved by the three joint venture partners.

The proposed development, which was given final environmental approval today, will create as many as 10,000 jobs at its peak and underpin a major expansion of liquefied natural gas (LNG) production across Australia.

Chevron greater Gorgon area general manager Colin Beckett said a few other formal approvals were needed before a final investment decision was made.

He said he did not want to pre-empt the decision, which should be made “fairly soon”.

But Chevron was committed to the project, he said.

“We now need to just turn our attention to finalising a few other formal approvals which will be of much lower profile,” Mr Beckett said.

Once those are out of the way we will be able to finalise our final investment decision.”

Mr Beckett said that once a decision had been made the next step would be to place purchase orders and contracts for project construction.

He said the company had already committed to $2 billion of contracts.

“By Christmas we would be starting to do some of the initial work on Barrow Island while in other places we complete our design and get on with the procurement activity,” he said.

“So we’ll be making early strides there and by the end of next year we’ll be working pretty flat out on Barrow Island itself.”

Accommodation for 3,300 fly-in, fly-out workers will be included in the construction phase, which is expected to create 7,000 jobs for people working on the project and a further 3,000 in spin-off employment.

Mr Beckett said the project would draw labour from across Australia.

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AUSSIE Home Loans has recorded a strong rise in the number of borrowers looking to refinance their mortgages, as home owners try to take advantage of record low interest rates.

The non-bank lender said refinancing accounted for 38.5 per cent of home loans written in June, up from 30.2 per cent in March.

“There have been plenty of home owners who have been complacent about their mortgages,” Aussie founder and executive chairman John Symond said.

“But our figures show that more and more of them are taking advantage of record interest rate lows and are actively seeking out the best deal.”

However, the number of first home buyers settling home loans dropped to 21.3 per cent of total loans written in June, from 32 per cent in March.

“The steam has abated in the first home buyer market as many of them realise that the properties available are probably already at full price,” Mr Symonds said.

“They are re-assessing the market.”

Aussie is one of Australia’s largest non-bank providers of financial services and has a loan book of more than $30 billion.

Source  :  www.news.com.au

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WESTERN Australia’s Liberal Government has handed down its first Budget, delivering a $647 million surplus but warning the state will be in deficit by 2012.

Treasurer Troy Buswell today delivered his first Budget since the Liberal Government came to power last year.

He said the 2008/09 surplus of $647 million would shrink to $409 million in 2009/10, and just $23 million the following year.

By 2011/12 the state will be in deficit to the tune of $513 million.

“Over the past months, as the global economy has been in decline, the state has been hit by large downward revisions to projected taxation revenue, GST grants from the Commonwealth and mining royalties,” Mr Buswell told parliament.

“Since the mid-year review, the Budget has lost a massive $4 billion in forecast revenue from these sources.”

Last year, then treasurer Eric Ripper delivered a surplus of more than $2 billion on the back of a booming commodities sector.

Economic growth remained high at 8 per cent for the 2008/09 financial year.

But forecasts predicted growth would fall into negative territory in 2009/10, with unemployment expected to peak, and business investment to fall by 17.5 per cent.

Mr Buswell said the Government would provide a one-year payroll tax rebate to small businesses with payrolls of up to $3.2 million to help protect jobs.

“Some 6,700 small businesses will be eligible for this payroll tax rebate, which will fully offset payroll tax for around 68,000 employees,” he said.

“The cost of this rebate is estimated at $100 million.”

A $47 million jobs training and skills package, and a $8.3 billion spend on infrastructure in the next financial year are key components of the Budget.
Mr Buswell said law and order were also strong focuses, in line with the Government’s election promises to boost funding for police and pump more money into prisons

Mr Buswell said the Government’s election promise to toughen up sentencing laws and introduce mandatory sentencing for people who assault police was underpinned in the Budget by a significant investment in prison capacity.

 

A total of $655 million will be invested in 2012/13 to create an extra 1657 prison beds across the state.

A record $5.1 billion spend on health services in the next year – rising 5.9 per cent, or $282 million from last year – will include the fast tracking of forward works for a new children’s hospital, the construction stage of the Fiona Stanley Hospital, and new hospitals in two regional centres.

Mr Buswell said the Government would push ahead with public sector reforms in a bid to achieve improved performance and efficiency.

The first stage of the economic audit committee promised by the Government during the last election was complete and a range of hard decisions had delivered $7.6 billion over the forward estimates, Mr Buswell said.

“I am looking forward to the second stage of the economic audit to identify strategies for broader reform over the longer term, so we can ensure the budget stays in surplus,” he said.

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