Tax Cuts Encourage Australians To Save Money For Home Deposit

Tax Cuts Encourage Australians to Save Money for Home Deposit

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Homestar Finance CEO Julian Mitton comments on Federal Budget tax cuts on interest earned on savings.

The Federal Budget initiative to cut by 50 per cent the tax applying to the first $1,000 of interest earned on savings and term deposits will boost the entire Australian banking and property sector, Homestar Finance CEO Julian Mitton said.

The Federal Government has for the first time given Australians an incentive to save more of their income outside of the superannuation system by cutting tax back 50 per cent on savings interest earned.

"More deposits in Australian banks means lenders will have access to a larger pool of wholesale funding without having to draw on uncertain international sources," Mr Mitton said.

"This gives the Australian economy greater resilience if international credit markets tighten up again. Its another good move by an Australian Government to firm up our banking system.

"People will be assisted to save more for a deposit on their homes so this is a positive change with wide reaching benefits.

Julian Mitton says this move by the Government is well needed following a sustained slide in loan and building approvals since June 2009, according to monthly ABS home finance statistics.

"With so many people borrowing close to their limit, the extra savings will go a long way to improving their access to a home loan. Small changes to deposits can make big differences to loan amounts." he said.

Julian Mitton
CEO
P 02 8353 2917
F 1300 437 007
M 0400 777 394
E [email protected]
W www.homestarfinance.com.au


SOURCE: Homestar Finance