Higher wages for Australian workers

Treasurer Wayne Swan's budget is good news for workers. Photo / Mark Mitchell

CANBERRA - Australian Treasurer Wayne Swan's third Budget last night might not have produced a traditional election-year lolly scramble.

But it hardly spelled penury for the nation's suburban battlers.

Treasury forecasts predict they will have higher wages and more money in their pockets in the coming 12 months - and will be ready to spend it.

More people will have jobs.

And for all his warnings of austerity and economic straitjackets, Mr Swan managed to pull a few bunnies from the hat.

Workers will get the final round of previously scheduled tax cuts, delivered through higher thresholds that will allow them to earn up to A$16,000 before paying tax.

The income levels at which progressive tax rates are imposed have also been increased.

The full package of cuts finalised last night means that over the past three years, the tax on a worker earning A$35,000 a year has fallen by by about A$35 a week.

A sliding scale for higher incomes means cuts fall to A$30 and $20 a week for incomes between A$55,000 and A$75,000.

Workers will also be encouraged to save through a 50 per cent tax break on interest of up to A$1000 a year earned on deposits, bonds, debentures and annuities.

And they will be further helped to save for their retirement.

The present 9 per cent of annual wages that employers must pay into their workers' super funds will increase to 12 per cent by July 2013.

Meanwhile, Australia has launched a A$500 million attack on home-grown terrorism, people smuggling and organised crime.

Measures announced in the Budget include more money for intelligence agencies, moves to monitor communities considered at risk of spawning violent extremism, and a boost to the security of the nation's passports.

The funding detailed by Mr Swan forms a key part of Australia's first co-ordinated national security budget.