In this assignment we have an opportunity to analyse the effects of the tax relief and incentives that have been introduced in the 2010 / 2011 Australian Government budget. We shall understand how this policy has affected the nation and how it has reduced the equitable distribution of taxation burden among the tax payers and to see how flexible the idea was to implement the policy and how it would affect the social, economic, technological and environmental changes.
During the 2010 / 2011 financial year the impact of the recession was also the other reason why the government was committed to indulge in the implementation of this act. This assignment includes the brief reason why the policy was included in resolving the macroeconomic issue and how it has been effective and the other unexpected outcomes that have been influenced by this act. We shall also see the different advantages and disadvantages that have been influenced with this act keeping in mind if there have been any negative impact in the national revenue due to its implementation.
And the final part we have included how the tax relief decision was a good idea and how the outcome was plotted and how it will affect the future decisions with the government’s commitment to its budget management strategies keeping the introduced acts and incentives introduced during the budget of 2010 / 2011.
Table of Contents
Executive summary 1
Impact of Personal Savings 2
Past Superannuation Policy 2
Assets Policy for Long-term 3
Previous Superannuation Policy 3
Advantages of Implementing the Policies 3
Disadvantages of the tax policies 4
Concluding comments 4
With the global financial crisis which didn’t really have an impact on the Australian economy, there were still some market and business slowdowns. The total country tax receipts rounded up to 13% i.e. 40 billion AUD more than it was anticipated in the budget of 2008 / 2009. Even the natural disasters occurred during the previous year of 2009 had a 0.75 per cent drop in the nations GDP during 2010 / 2011 which also showed loss in the various industries(Australian Government Budget Outcome 2010).
The budget of 2010/2011 showed that it favoured the Working Australians providing a benefit of income tax cut. We shall see the different possible reason for the revision in the macroeconomic policy of tax relief and superannuation policy introduced.
Impact of Personal Savings
The studies indicate that there has been steady decline in the gross national savings rate of Australia over the last 20 years in comparison to the other OECD (Organisation for Economic Co-operation and Development) co-members and before 2008 there were no tax incentives provided to individual tax payers despite the interest income was derived in cash or term deposits with the financial blocks(2010 - 2011 Pre-Budget Submission 2010). With such relative less return an individual had, there were very less incentive return to maintain a decent savings. That is one reason why the budget of 2010/2011 included the removal of interest income that was given by tax paying contributors
Past Superannuation Policy
Before 2010, the superannuation guarantee contributions scheme there was a 9% of the employee income that was in remission with the companies they worked in. But the study that was done by IFSA (Investment and Financial Services Association) which stated that the countries natives had a less quality of life based on the savings deficit (IFSA 2007). This was another reason for the implementation of the act.
Assets Policy for Long-term
The 2008 tax Statement set off by the Capital gain tax discount was 7.670 billion dollars to the lead the year 2010 / 2011 by the government which was to cause to the discount applied by individuals on the superannuation funds. With such a co-contribution scheme the Australians with less income did not