Australian savers will be rewarded by the Government following the successful passage of the Savings Rebate through the Senate, the Assistant Treasurer Senator Rod Kemp, said today.
The Savings Rebate offers a significant tax break to people who earn income from their savings or investments and will provide a real incentive for Australians to save more. It is an important step in building Australias savings culture.
The rebate also rewards those who have already saved, particularly self-funded retirees with income from privately funded pensions and annuities.
The Savings Rebate allows Australians to choose the way in which they save and replaces Labors 1995-96 Budget proposal to match compulsory superannuation contributions by employees. Labors proposal was highly discriminatory and undeliverable. It would have provided no benefit to the retired and those ineligible to contribute to superannuation.
Senator Kemp urged taxpayers to start saving now to ensure they obtain the maximum rebate. Eligible taxpayers will be able to claim the rebate from 1 July 1998 through the PAYE and provisional tax systems or on assessment at the end of the year.
The Savings Rebate is a major initiative of the 1997-98 Budget. The Rebate is designed to encourage private savings and enhance Australias retirement income system in a simple, fair and flexible way which allows individuals to choose the form of saving most suited to their needs.
The bulk of the savings rebate will flow to Australians earning less than $40,000.
From 1 July 1999, a savings rebate of 15 per cent (up to $450) will apply on up to $3,000 of personal (undeducted) superannuation contributions and/or net income from a range of savings or investments including dividend income and net capital gains. For low to middle income earners, the first $1,000 of personal superannuation contributions will attract both the savings rebate and the existing 10 per cent tax rebate that is available to individuals earning up to $31,000 in respect of personal superannuation contributions of up to $1,000.
A transitional rebate of up to 7.5 per cent (up to $225) will apply in 1998-99. All resident individual tax paying taxpayers are eligible.
27 May 1998
Contact:
Penny Farnsworth
(02) 6277 7360
(0419) 482 497