Savings tax to be slashed

The federal government’s Henry review into taxation is set to recommend that tax on savings should be slashed. Ken Henry said yesterday that a middle income earner paid an effective tax rate on their bank account savings of around 50 per cent, once inflation was factored in. In contrast, he said the tax system favours investments in superannuation and negative gearing. Also yesterday the International Monetary Fund warned that Australia had to boost its level of domestic savings to provide more finance for its own investments.

Source: The Age