Regardless who wins this years Federal Election, taxpayers in Australia will be looking forward to a top marginal tax rate of only 40% from 2014 onwards.
Both the Howard led Liberal Government and the confident Labor Opposition party led by Kevin Rudd, have announced their tax policies leading up to the Federal Election set for 24th of November 2007.
This is great news for the many expatriates and intended migrants considering heading to Australia in the coming years and will see an end to the high tax years of a by gone era.
As recently as 1985, Australians struggled under a top marginal tax rate of 60% that was applied once your annual taxable income exceeded just A$50,000.
Changes over the years saw this progressively reduce down to 47% and more recently 45%, however the main change was that it does not occur until your taxable income exceeds A$180,000 from 1st July 2008.
The fact that both parties have now recognized the importance of low personal taxation in order to keep the economy strong and allow taxpayers the choice of their spending habits is a major benefit to keep the Australian economy growing at a steady rate.
Goods & Services Tax, introduced in July 2000, has made a dramatic positive effect on financial collections for Government and allowed the distribution of funds from Federal to State Governments to occur sensibly each year, as the states are entitled to the full GST Collection.
This has allowed the Federal Government the freedom to collect and allocate revenue for personal taxes to debt reduction and economic stimulus.
This system will also not be affected by any change in the Federal Government, so it has become refreshing to be able to consider Australia a low tax country, a concept that would have been laughed at in recent past.
With the continuation of Tax Free Retirement incomes from Australian Superannuation funds, and the many other tax incentives available for property investors and overseas based investors and expatriates, we can look forward to the future of Australia continually improving its tax system efficiency for the benefit of the individual rather than the ruling Government party.
