The Treasurer has announced that the start date of the 50 per cent tax discount for interest income will be deferred until 1 July 2013.

The proposal is that in 2013-14, individuals will be entitled to a tax discount equal to 50 per cent on up to $500 of interest income received. From 1 July 2014, individuals will be entitled to a tax discount equal to 50 per cent on up to $1,000 of interest income received each year.

The discount will apply to interest received from deposits held with any bank, building society or credit union, as well as interest on bonds, debentures and annuity products.

UPDATE 10 May 2012: this proposal has been abandoned.