Key legislation was passed by Parliament today which will make the tax system fairer

for all taxpayers. These measures will take effect from tomorrow, 1 July, the day

Australia moves forward with the introduction of The New Tax System.

From tomorrow, income taxes will be reduced by $12 billion a year, the largest ever

legislated and delivered.

From tomorrow, family assistance will be boosted by $2.4 billion a year.

From tomorrow, pensions and allowances will be higher in real terms. Self-funded

retirees will benefit from tax cuts, a special bonus, and franking credits becoming

refundable.

From tomorrow, company tax will be cut from 36 to 34 per cent, and will be further cut

to 30 per cent next year.

And from tomorrow, the complex multi-rate wholesale sales tax will be abolished

completely.

From 1 July 2000, there will be new rules to restrict the ability to deduct

non-commercial losses against wage and salary income.

The Government’s measures to address the alienation of personal services income

will protect genuine independent contractors but prevent easy access outside the PAYE by

others seeking to minimise tax liability.

Legislation has been passed which will align the deductibility of payments made in

relation to ‘tax shelters’ with the period over which the service is provided,

rather than being deductible immediately.

These measures are part of The New Tax System which will commence as from tomorrow.

The Government’s reform of personal, business and indirect taxes will boost

economic growth, improve Australia’s international competitiveness and create more

jobs. They will be of enduring benefit to the people of Australia.

MELBOURNE

30 June 2000