Budget Sees 1.5 Million Families Better Off (08/05/2012)

waswa.jpgI’m writing to give you a quick summary of the Australian Federal Budget which was handed down by Treasurer Wayne Swan tonight.

The key thing about this budget is it supports core Labor policies. It’s about spreading the wealth to all corners of our country by delivering much-needed new financial relief to families, older Australians and businesses under pressure.

I’m very pleased that $1billion has been set aside to launch the National Disability Insurance Scheme along with another $3.7 billion for crucial aged care reform.

We’re introducing a new Schoolkids Bonus Payment which provides $410 for primary school children and $820 for those in high school. This will deliver $27 million annually to households in the Illawarra and Southern Highlands, which is a welcomed boost to our local economy.

We’re channelling $1.8 billion from the Minerals Resources Rent Tax towards increases in Family Tax Benefits.

In addition, from 2012-13 there will be tax cuts for all taxpayers earning up to $80,000, including a tripling of the tax-free threshold and increases in the pension for more than 3.4 million pensioners.

Tax relief will also be extended to local businesses with the introduction of a ‘Loss Carry Back’ Scheme and tax write-offs for small business expenses.

More support for families

In addition to the automatic and upfront Schoolkids Bonus, more than 1.5 million families will receive a boost to their Family Tax Benefit (FTB) Part A from 1 July next year.

All families that are eligible for FTB Part A will receive an increase:

  • Families receiving the maximum rate of FTB Part A with two or more children will receive an extra $600 a year, or an extra $300 a year if they have one child.
  • Families receiving the base rate of FTB Part A with two or more children will receive an extra $200 a year, or an extra $100 a year if they have one child. 
  • Families with teenagers aged 16 to 19 years in full time secondary school will see and increase in ther FTB Part A by up to $4,208 per year.

Over a million Australians will benefit form a new lump sum Supplementary Allowance to help those receiving payments such as the Parenting Payment allowances, which will provide $210 per year for singles and $350 a year for couples.

This assistance builds on the tripling of the tax free threshold, from 1 July this year, delivering tax cuts to all tax payers earning up to $80,000.

A helping hand for older Australians

To help older people live independently in their own homes longer Labor is increasing the number of Home Care Packages from 59,876 to almost 100,000 and we’re capping costs so that full pensioners pay no more than the basic fee for aged care.

To ensure that there are immediate improvements as well, the Federal Government will:

  • Increase residential aged care places from 191,522 to 221,103
  • Fund $1.2 billion to improve the aged care workforce through a ‘Workforce Compact’
  • Inject $270 million into dementia care in aged care, and more support services

The maximum rates of pensions, allowances and FTB Part A will be increased by 1.7 per cent. Full and part-rate pensioners and Commonwealth Seniors Health Card holders will receive annual increases of $338 for singles and $255 each for couples.

Any low income households that do not receive enough assistance through tax cuts and increases to payments to cover their average expected price impact will be able to claim a new Low Income Supplement of $300 per annum.

National Disability Insurance Scheme

The Labor Government will deliver $1 billion over four years to start rolling out the first stage of a National Disability Insurance Scheme (NDIS).

The first stage of an NDIS will begin in mid-2013 and will provide care and support to around 10,000 people with significant and permanent disabilities in up to four locations across the country. From mid-2014, the reach of an NDIS will be expanded to bring the total number of eligible people up to 20,000.

Key features of the NDIS:

  • provide eligible individuals with the care and support they need when they need it;
  • give individuals decision making power, including being able to choose their service provider;
  • provide high quality, evidence-based services which manage life-time costs of care;
  • be simple to navigate and link to mainstream and community services;
  • recognise the essential care and support of families and carers and support them in that role;
  • facilitate each individual’s community participation, access to education and employment opportunities; and
  • be managed on an insurance basis.

Boost for local businesses

From 1 July the Government will provide further tax relief for companies that report a loss through the introduction of a Loss Carry-Back Scheme.

Currently businesses can carry forward losses to future tax years to offset their profits and therefore reduce their tax bills. Companies that incur losses from 2012-13 will also be able to carry back those losses to offset previous profits so that they get a refund from tax previously paid.

The Government is also helping to improve incentives for Australia’s 2.7 million small businesses to invest, helping to improve their cash flows.

From 1 July 2012, small businesses will be able to instantly write-off each and every asset they purchase costing less than $6,500 – a full deduction straight away, rather than waiting. The first $5,000 of the cost of motor vehicles will also be able to be deducted immediately.

This is a Labor Budget

It supports workers and parents and helps businesses prosper. It’s about spreading the tremendous opportunities of the mining boom fairly and ensuring that funds are redirected to the purposes and people that need them most. The deficit years of the global recession are behind us. The surplus years are here.

More details on these and other budget initiatives will be available from my office in the days to come and are also outlined in Treasurer Wayne Swan’s Budget speech handed down tonight.