The Government has pushed back commencement of the tax discount for interest income to July 2013. The change was included in a package of revenue measures in the Government's Mid-Year Economic and Fiscal Outlook (MYEFO), which was released yesterday.The savings tax discount has had a long and difficult gestation. The scheme was first announced back in May 2010 and was to have taken effect in July this year. It was then put back a year and now it has been put back again. The tax discount will apply on up to A$500 of interest income in the first financial year of operation and $1000 in subsequent years. The discount will exempt 50 per cent of eligible interest income up to the amount of the cap.By delaying commencement, the savings to the Commonwealth Budget in 2012/13 will be an estimated $275 million.In July, Treasury issued a discussion paper outlining the details of the scheme. All but one of the nine submissions in response to the paper said the proposal was deeply flawed.The low level of the cap came in for criticism, as well the proposal to apply the discount to net interest rather than gross interest. This was criticised as adding unnecessary complexity to the scheme.The Government acknowledged these criticisms in the MYEFO papers. It said: "The Government will take the opportunity provided by delaying this measure to give further consideration to implementation issues and further consult industry and stakeholders."Australian Bankers Association chief executive Steve Munchenberg said: "The year-long deferral is disappointing, but it gives the banking industry more time to work with the Federal Government to get a more effective scheme with a higher cap in place."