Swan rewards working families

Published: May 14, 2008 - 12:07 PM

Budget includes a number of incentives aimed at easing pressure on household budgets

Treasurer Wayne Swan has recognised the struggle working families face in today's environment of rising living costs in delivering the Rudd Government's first budget on Tuesday night. The budget includes a number of incentives aimed at easing pressure on household budgets for those families trying to bring up their kids, buy their family home and make ends meet.

Swan has delivered a Working Families Support package of $55 billion which includes:

Tax cuts of $46.7 billion to be given over the next four years including an increase in the Medicare levy surcharge threshold which will mean singles with an income of up to $100,000 and couples with an income of up to $150,000 will no longer be hit with the surcharge
An increase in the childcare rebate from 30% to 50%
Payment of the childcare rebate to be made quarterly instead of annually
An increase in the baby bonus to $5000
An Education Tax Refund helping families educate their children, with a tax refund available for 50% of education costs of up to $375 per primary school child and $750 per high school child per year
Assistance to first home buyers including a Government contribution of 17% (up to $850) to First Home Saver Accounts for the first $5000 every individual saves and interest earned on the accounts will only be taxed at 15%
A National Rental Affordability Scheme and a new Housing Affordability Fund to boost housing supply and incentivise investors to provide low-cost housing allowing tenants to have more money available to save for their own home.

These cuts will take effect from 1 July 2008 and will mean that a family on an average income with both parents working and 2 young children will have an extra $51.54 each week to live on. A working family with an average household income and older kids in high school will be $43.27 per week better off and a single on an average income will be $25 per week better off. (Source: SMH 13/5/08)

The Government has also introduced means testing for the Baby Bonus and Family Tax Benefit B both of which will now not be available to those with a household income of over $150,000. Whilst these provisions are seen as reasonable by most sectors of the community there have been some questions raised about the fairness of means testing of these benefits in capital cities, especially Sydney, where housing and living costs are particularly high and an income of $150,000 by no means makes a family well off.

Seniors were also winners in the budget with the Government recognising the additional pressure seniors are under when battling rising living costs. The Government introduced a range of measures to help seniors balance their household budgets. The utilities allowance which seniors can use to help them cover the costs of their electricity and gas and water bills has gone from $107.20 to $500 per year . With energy electricity and gas prices set to rise over the next few years this significant increase will be welcomed. The Seniors Concession Allowance has also been raised from $218 to $500 per year, the Telephone Allowance from $88 to $132 per year for those with an Internet connection and Seniors will again receive the $500 Seniors Bonus.

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