News Budget savings initiative to boost deposit pool
The Federal Government’s recent announcement of savings initiatives in the federal budget should encourage people to increase their savings.
The federal budget announced a 50 per cent tax discount to the first $1,000 of interest earned on certain savings products.
When making the announcement, the Government said the move, which commences on 1 July 2011, will incentivise Australians to save for the future - subsequently increasing the pool of deposits.
First Option applauds this move, as higher savings can only be good for the Australian economy.
This initiative will make savings more attractive to more Australians and as a result, will mean higher levels of savings. A higher level of savings means a boost to much needed competition in retail banking.
First Option welcomes this initiative to boost savings in Australia and we agree with the observations in the Budget papers that this will allow Credit Unions to put competitive pressure on the big banks over time.
