Infrastructure The government is looking to implement improvements to road, rail and ports over the next 6 years allocating $8.4 billion to improve city livability. The bulk of this funding is aimed at improving metropolitan rail links and the main road transport route between Melbourne and Cairns.

Investors A tax loophole for the wealthy has been lost. Under the new rules, people who earn more than $250,000 a year will no longer be able to deduct losses from their unprofitable businesses from their own income; the loss will only be deductible from business income. For shareholders the rules relating the use of private company assets will tighten, meaning the use of company owned assets such as cars, boats and properties without paying tax will not be allowed.

Tax The government has honoured already announced personal income tax cuts. From 1 July the tax rate in the $80,000 to $180,000 tax bracket will drop from 40% to 38% then to 37% from 1 July next year.

Despite the introduction of the promised tax cuts, in combination with high levels of spending in many other areas, the federal budget is forecast to remain in deficit for the next 6 years.

The 2009 budget is a recovery budget with the key areas of infrastructure construction, job protection and pensions being substantially funded by cuts to middle-class welfare being the core focus. Whilst this budget will aim to help Australia recover from the recession most of the proposed effects will not be seen until the economy recovers.

The team of legal and accounting professionals at The Quinn Group pride themselves on keeping up to date with the latest Australian consumer and business news and advancements. If you would like advice on how you can make the most of the current economic climate and optimise your financial position contact us on 1300 QUINNS or click here to submit an online enquiry.

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