TAXATION cuts of $3.4 billion will start to flow from this Wednesday, as the Rudd government prepares to roll out massive changes to social security and superannuation.
The tax cuts from July 1 and next year will lift the 30 per cent threshold from $34,000 to $35,000, reduce the 40 per cent rate to 38 per cent and raise the maximum low-income offset from $1200 to $1350. People earning up to $67,500 will be entitled to some offset, The Australian reports.
People in a same-sex de facto relationship will be recognised as members of a couple for social security and family assistance purposes and will be required to advise Centrelink of their status. This change will mean some people may move from the single to the partner rate of payment.
The pause to indexation of upper-income thresholds of Family Tax Benefits A and B and the baby bonus will begin. This means indexation will not increase for three years for the upper-income thresholds for these benefits. The government will halve the concessional superannuation contributions cap and the reduction in transitional contributions cap. This is the biggest saving in the budget, amounting to about $2.7billion over the next four years

There will also be a temporary reduction in the Government co-contribution.

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There will be tax breaks for businesses entitled to a bonus tax deduction of 10 per cent - down from 30 per cent - for eligible asset investments between July 1 and December 31.

There are changes to employee share scheme concessions and the targeting of the income tax exemption for Australian residents employed overseas in aid, charity, defence or police work.

Wayne Swan said Wednesday would bring big changes.

"Australians who are eligible for the tax bonus as part of the Government's stimulus measures to support jobs and businesses have now got only today and tomorrow to lodge their 2007-08 tax return," the Treasurer said, advising those eligible for the bonus: "It's worth getting your skates on."

Mr Swan said the new tax relief "provides more incentive for hard work and builds on the major tax cuts of last year, as well as the government's economic stimulus payments".

The record $64bn healthcare agreement between the commonwealth and states comes into operation on July 1. Funding for maternity workforce support and a new Medicare rebate for magnetic resonance imaging scans for the initial stages of rectal cancer will begin, and a range of drugs will be listed on the PBS.

However, the opposition wanted to focus on another milestone, saying the national debt will pass the $100bn mark this week.

(From http://www.news.com.au)