PM's tax cut plans to benefit 7m households

Australian households may find it easier to add to their savings accounts if tax cuts outlined by the prime minister Julia Gillard come into force.

She explained to the Sunday Telegraph that nine out of ten households are set to benefit from the cuts, with parents with an income of up to $128,000 and three children to receive additional welfare payments.

Nearly two million parents are set to receive higher amounts from the state under the scheme, news that might lead more to put money aside in a savings account.

According to figures from the Melbourne Institute, the proportion of Aussies putting cash away "for a rainy day" rose in June to the highest level since the study began.

"These tax cuts and payment increases will be targeted at those who need them most: Pensioners, low-income earners and middle-income earners," Ms Gillard asserted.

However, while the government promises cuts in the future, Tony Abbott, leader of the opposition, said his party will also offer cuts and will abolish carbon tax.

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