Tax breaks 'may help savers'

Mozo

Monday 25 January 2010

Australians may be encouraged to save more if new tax regulations come into force, an expert has said.

Peter Evers, managing director of credit union Australian Central, spoke to News Limited as part of a survey of possible trends in personal finance during the coming decade.

He said that there is a good chance that the recent Henry Tax Review will prompt the federal government to lower the tax rate on interest from savings accounts.

Mr Evers suggested that such a regulation could include a tax exemption for the first $1,000 of interest income and then a tax rate of only 15 per cent after that, in line with current superannuation rules.

Discussing changing consumer attitudes towards saving, Mr Evers said: "The first decade of this century was really about increasing debt and living lifestyles on borrowed money. The next decade will be about managing our cashflow and not living beyond our means."

Such comments may encourage Aussies to compare savings accounts in search of the best savings interest rates. Earlier this month, the Daily Telegraph reported that households will have to find up to $76 a week extra this year as the cost of living soars.

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