[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Tuesday, 9 May 2006, 19:24 GMT 20:24 UK
Australia unveils huge tax cuts
Australian Treasurer Peter Costello
Mr Costello hopes the cuts will help cut unemployment further
The Australian government has unveiled wide-ranging tax cuts in a "middle income family friendly" budget.

The move takes advantage of an unexpected windfall for government finances from a minerals market boom.

Treasurer Peter Costello unveiled income tax cuts worth almost 37bn Australian dollars ($28.6bn; 15.3bn) - the biggest in the country since 2000.

Further measures proposed included raising spending on defence and tax changes to encourage retirement saving.

Mr Costello said the decision to cut income tax should help to reduce unemployment in the country, which is already at record lows.

"These changes... will provide more incentive for those outside the workforce to re-enter it and those in part-time work to take additional hours," he said.

Surplus

Mr Costello added that the cuts should not trouble government as it had posted a healthy surplus and inflation was under control, easing below the 3% level.

Mr Costello added he expected a budget surplus of A$10.8bn and economic growth of 3.25% over the coming financial year.

Experts said the move would prove popular with voters currently struggling against high petrol and mortgage costs.

But they did add it was unlikely to trigger a further increase in rates which currently stand at 5.75%.

Parliament must approve the plans. However, as Prime Minister John Howard's centre-right party has a majority in both houses of the Australian parliament, the plans are widely expected to be passed.


SEE ALSO:
China to buy Australian uranium
03 Apr 06 |  Asia-Pacific
Howard marks 10 years on top
01 Mar 06 |  Asia-Pacific
Mass labour rallies in Australia
15 Nov 05 |  Asia-Pacific
Australia seeks workplace reforms
26 May 05 |  Business
Buoyant spending boosts Australia
07 Sep 05 |  Business
Australia welcomes export surge
02 Aug 05 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific