THE HIP POCKET – Swan spends up on tax cuts and family assistance, but the well-off get crunched
Tuesday, May 13, 2008/
Treasurer Wayne Swan has delivered on the Rudd Government’s promised tax cuts as part of a $55 billion package for its core constituents, working families.
The tax cuts, worth $46.7 billion over the next four years, will cut the tax paid by a worker on $80,000 a year by $21.15 per week from July 1, 2008. That saving will rise to $24.04 on July 1, 2009 and $29.81 on July 1, 2010.
In an additional move designed to encourage parents back into the workforce, the tax cuts will allow workers to earn by to $14,000 in 2008-09 without incurring a net tax liability, up from $11,000 in 2007-08. The government says that by 2010-11, a typical second-income earner will be able to work 14 hours per week without paying tax. “For too long, working families have watched the proceeds of the boom directed elsewhere, in the form of tax cuts skewed to those already doing well. Tonight we tip the scales in favour of working families,” Swan said.
As promised, the government has increased the Child Care Tax Rebate from 30% to 50%, with the annual cap increased from $4354 to $7500 per child. The rebate will also be paid quarterly.
There is also $4.4 billion for the Education Tax Refund, under which parents will be able to claim a 50% refund on eligible education expenses – up to $375 million for a primary school child and up to $750 for a secondary school child each year.
The Government has followed through on its promised housing affordability package, with $1.2 billion for its first home savers accounts, which will help first home buyers save in a more tax effective way. The National Rental Affordability Scheme, which was also foreshadowed in the election, has also been established at a cost of $623 million over four years.
As foreshadowed a few days before the budget, the government will also increase the income thresholds for the Medicare Levy Surcharge from $50,000 a year to $100,000 for singles and from $100,000 to $150,000 for families.
That’s the good news. But for those families earning more than $150,000, there’s some bad news too. From January 1, 2009, the baby bonus will be means test to make families earning $150,000 ineligible.
Be honest about your situation: How vulnerability helps businesses thrive Sue Parker DARE Group founder
Own it: The 10 things you need to do to manage your personal brand Lisa Stephenson Who Am I Projects founder
Six invaluable lessons: What 20 years in aged care taught me about being an entrepreneur Natasha Chadwick NewDirection Care founder
An entrepreneurial superpower: Eight tips to help develop resilience Adala Bolto ZADI Training co-founder
Going through a lull? Five areas you should invest in when sales drop Tamara Alaveras and Sonia Majkic 3 Phase Marketing co-founders
Stop telling us how busy you are, it's boring and charmless Ian Whitworth Scene Change co-founder
Blandification™ and the state of modern branding Jeffrey Oley The Offices co-founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder