By now you may have received many versions of the recommendations of the Henry Report into the tax system and the Government’s response to this. Also, last night the Government delivered their Budget for 2010. Most news providers have covered some of the major points as well as criticising the Government for only proposing four main changes to the tax system, on the back of Henry’s 136 recommended changes.
Taking a step back from the detail, one thing is guaranteed – our financial system will keep changing. It is important to be aware of the changes that affect you. However, it is equally important to realise that these changes won’t necessarily provide real changes or windfalls to your financial position. Ultimately, the real benefits arise from what you actually do and don’t do. Being proactive with your money management, which means taking advantage of any favourable change, can bring about great short term and long term benefits.
As outlined in our Cashflow and Compounding learning module, a little change, like saving an extra $20 a week or paying an extra $20 a week off your mortgage, over a long period of time, can make a great difference.
If you are one of those who get a little extra money as a result of a Government change, be proactive and ensure you are using all, or at least part of it, for mortgage reduction or wealth accumulation, rather than letting it just slip through the fingers. Our next newsletter will look at this concept in more detail.
For those that like the detail, below is a brief summary of the changes to tax as a result of the Henry review and some of the more prominent budget changes that we feel may impact you.
Outcomes from the Henry review into Taxation
The main components of the Government’s response to the Henry Report into the Taxation system include:
Outcomes from the 2010 Federal Budget
The main components of the Government’s 2010 Federal Budget that we feel might be relevant to you are as follows:
One observation is that there has not been too many stimulation type measures by the Government, which may help interest rates stay at reasonable levels.
We hope some of the changes over the last couple of weeks provide a greater opportunity for you. If you are in doubt about how these changes affect you, we encourage you to speak with your professional adviser.