The financial services sector has welcomed federal budget measures to improve the nation’s savings culture and advance Australia’s standing as a global investment hub.

The Financial Planning Association (FPA) has come out strongly in favour of the Federal Government’s 50% tax discount on up to $1000 of interest, including that earned on deposits, bonds, debentures and annuity products.

“Along with the superannuation measures announced last week… the 50% tax discount on interest on bank deposits will improve retirement benefits and generally build a savings culture for low income earners,” FPA Acting CEO Deen Sanders said.

The FPA is also pleased with a new standard deduction to simplify tax returns, increases to Medicare levy thresholds for low-income earners, as well as new breaks for businesses, in particular the earlier introduction of the company tax rate reduction to 28% and depreciation measures for small businesses.

But it’s not all smiles. The association says it’s disappointed that a number of decisions – most notably measures to improve Australia’s savings culture – won’t be implemented for several years. The reversal on returning the co-contribution to  $1500 and the freezing of income “eligibility” thresholds over the next two years has also been criticised.