the hon peter costello treasurer 2006-07 post-budget address
TRANSCRIPT
The Hon Peter CostelloTreasurer
2006-07 Post-Budget Address
Underlying cash balance
-3
-2
-1
0
1
2
3
1995-96 1999-00 2003-04 2007-08
-3
-2
-1
0
1
2
3
Ou
tco
me
s
Est
ima
tes
Pro
ject
ion
s
Per cent of GDP Per cent of GDP
General government sector net debt and net interest payments
-5
0
5
10
15
20
1981-82 1985-86 1989-90 1993-94 1997-98 2001-02 2005-06
-0.5
0.0
0.5
1.0
1.5
2.0
Net debt (LHS) Net interest payments (RHS)
Est
ima
tes
Ou
tco
me
s
Per cent of GDP Per cent of GDP
Ability to re-direct spending
0
10
20
30
40
1996-97 2006-07
0
10
20
30
40
Assistanceto families
with children
Hospitals& schools
Hospitals& schools
Assistanceto families
with children
Public debt interest
Public debtinterest
$billion $billion
Terms of trade
70
80
90
100
110
120
130
Jun-65 Jun-71 Jun-77 Jun-83 Jun-89 Jun-95 Jun-01 Jun-07
70
80
90
100
110
120
130
Fo
reca
sts
Index (2003-04 = 100) Index (2003-04 = 100)
Personal income tax cuts
Current tax thresholds Tax rateIncome range ($) %0 - 6,000 06,001 - 21,600 1521,601 - 63,000 3063,001 - 95,000 4295,001 + 47
Current tax thresholds Tax rateIncome range ($) %0 - 6,000 06,001 - 21,600 1521,601 - 63,000 3063,001 - 95,000 4295,001 + 47
2005-06
• Low Income Tax Offset increase to $600 plus phase out from $25,000 (up from $21,600).
• Medicare levy phase-in halved.
New tax thresholds Tax rateIncome range ($) %0 - 6,000 06,001 - 25,000 1525,001 - 75,000 3075,001 - 150,000 40150,001 + 45
From 1 July 2006
Personal Income Tax Cuts
Income range Tax rate Income range Tax rate($) % ($) %0 - 5,400 0 0 - 6,000 05,401 - 20,700 20 6,001 - 25,000 15
20,701 - 38,000 34
38,001 - 50,000 43 25,001 - 75,000 30
50,001 + 4775,001 - 150,000 40150,001 + 45
1 July 1996 1 July 2006
Work incentives with income tax reform
0
10
20
30
40
50
60
70
80
90
100
10,000 30,000 50,000 70,000 90,000 110,000 130,000 150,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Tax savings - $ per year (RHS) Tax savings - percentage reduction (LHS)
Taxpayer's annual income ($)
Tax cut per year (% of tax paid) Tax cut per year ($)
A more competitive income tax system
0
2
4
6
8
10
12
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0
10
20
30
40
50
60
70
80
Australia (2004-05)Average
threshold = 2.4
Average top marginal tax rate = 46.7
Aus
tral
ia
Top threshold, multiple of the average wage (bars) Top marginal rate, per cent (dots)
A more competitive income tax system
0
2
4
6
8
10
12
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Gre
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Cze
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Tur
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Spa
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Fra
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Can
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Pol
and
Sw
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Kor
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Japa
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gal
Ita
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0
10
20
30
40
50
60
70
80
Australia (2004-05) Australia (2006-07)Average
threshold = 2.4
Average top marginal tax rate = 46.7
Aus
tral
ia
Aus
tral
ia
Top threshold, multiple of the average wage (bars) Top marginal rate, per cent (dots)
Increased benefits for families from 1 July 2006
• Family Tax Benefit Part A threshold will increase from $33,361 to $40,000– In 2004 the first taper rate was reduced from 30% to 20%
• Large Family Supplement will extend to families with 3 children
• More child care places– Outside School Hours Care and Family Day Care places will be
uncapped
• Maternity Payment will increase from $3,166 to $4,000
• Child Care Tax Rebate will be payable
Older Australians and carers
• One-off payment equal to Utilities Allowance ($102.80)– To pensioner households– To individual self-funded retirees– To households with recipients of Mature Age Allowance,
Partner Allowance, Widow Allowance
• Ongoing eligibility to Utilities Allowance extended to recipients of Mature Age Allowance, Partner Allowance and Widow Allowance– Six-monthly payments will commence in 2006-07
Business tax cuts
0
200
400
600
800
1,000
1,200
1,400
2006-07 2007-08 2008-09 2009-10
0
200
400
600
800
1,000
1,200
1,400$million $million
Superannuation proposals
• No benefits tax for retirees aged 60+– Simpler tax arrangements for retirees aged 55-60– Reasonable Benefit Limits abolished
• More generous pension assets test taper– Taper rate halved to $1.50 per $1,000 above $157,000
(single homeowner)
• Self-employed: full deductibility and access to co-contribution
• More flexibility for people who want to work longer
Simpler tax rules for retireesLump sums – Age 60+
Simpler tax rules for retireesSuperannuation pensions
Includes superannuation pensions commenced before 1 July 2007