This year’s Federal Budget is as much an annual report (looking back on the past period) as a traditional forward looking budget.

Whilst the headline tax changes were previously announced in response to the Henry Tax Review on 2 May, there is actually a lot of information that is relevant to business and the financial services industry. It seems that Treasury and other departments have cleared their desks in readiness for an election.

Key points include:

• From 1 July 2011, individuals will be eligible for a tax discount equal to 50 per cent on up to $1,000 of interest earned, including on deposits held with any bank, building society or credit union, as well as bonds, debentures or annuity products.
• From 1 July 2012 individual taxpayers will have an optional standard deduction of $500 in lieu of claiming work-related expenses and the cost of managing their tax affairs. The standard deduction will be increased to $1,000 from 1 July 2013.
• modification to the rules for First Home Saver Accounts
• The Government has issued its response to the Report on Australia as a Financial Centre:
  The Government will phase down the Interest Withholding Tax (IWT) incurred by local subsidiaries and branches when they pay interest on borrowings from their overseas parents. This reform also extends to Australian-owned financial institutions borrowing from related parties overseas, and any financial institution borrowing offshore retail deposits which they on-lend in Australia.More detail
• GST reform measures
• amendments to CGT roll-over relief on restructures
• Regulation of charitable public ancillary funds
• consultation on an investment manager regime
• amend income tax law to improve the operation of rules relating to the calculation and collection of income tax liabilities from consolidated groups and multiple entry consolidated groups (MEC groups).
• the commencement of electronic health records by mid-2012
• The Australian Transaction Reports and Analysis Centre (AUSTRAC) will be given an extra $24million to target serious and organised crime, revenue evasion and financial fraud
• funding of the national business name registration system
• release of an Exposure Draft for Changes to the Taxation of Capital Protected Borrowings