Financial Literacy Year 10 Flashcards
Taxation
compulsory monetary contribution made by individuals and businesses to government.
Purpose of Taxation
-redistribute income and wealth across society
Progressive tax
a tax rate that increases as taxable income increases, meaning the more income and individual earns, the more they pay in tax to the government.
Medicare
Medicare levy funds some costs of Aus’ public health system (medicare)
-Medicare levy is an additional amount of net paid on your income tax
Taxable income
0-$18,200- no tax
$18,201- $45,000 -
Goods and Services Tax (GST)
10% tax on most GS’
-buisnesses collect GST for government through ATO
-some things are GST free sales
Tax File No.
personal reference no. in tax and superannuation systems
Assessable income
income earned that you must pay tax on
Social Security and Welfare Spending
transfer payments made to individuals
- assist with minimum adequate standard of living
Age Pension
-social welfare, supports older Australians as their main or only income source
- eligible from 67 and income test to determine if not sufficient savings and superannuation
- amount paid by government to individuals
Benefits and Challenges of high tax rates
provides reliable tax revenue for government spending on public infrastructure and benefits.
limits individual economic freedoms and agency and makes it difficult for some struggling income brackets to pay for other things
Consumer- (EA)
those who buy goods and services to satisfy their wants.
-purchase gs’ from producers
-pay direct and indirect tax to gov.
-provide labour to producers and receive income
-receive benefits from government (e.g pensions, unemployment benefits)
Producers (EA)
firms that produce goods and services
-employing labour to consumers
-paying company tax on profits
-receive indirect benefits from gov (roads, optic fibre, infrastructure)
-provide goods and services to consumers
Government (EA)
Governments regulate the economy
-taxing producers and consumers (di)
-spending on public infrastructure (some helps firms produce g’s and s’s)
-impose regulations on consumers and producers (minimum wage..)
Australian Federal Budget
set of documents released by Aus gov outline expected tax revenue and allocated spending over next 4 years
-very big and detailed budget with a goal of ‘balance’
Superannuation
government policy that encourages the building of an individuals savings for retirement in oder to rely less on age pension.
Investment options with Super
Conservative, balanced, growth
Conservative investment
