Couples who skipped watching Wayne Swan’s budget speech on Tuesday night in favour of conceiving a child should thank their lucky stars they did.
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The Government will axe the $5000 baby bonus from March 2014, a measure likely to anger would-be parents but appease economists and bureaucrats who consider the payments bad policy.
The $5000 payment will be replaced by a $2000 increase in Family Tax Benefit Part A, which will be paid in fortnightly installments. Second or subsequent children will trigger a $1000 increase in the tax benefit.
Parents who take up the government’s Paid Parental Leave scheme will not receive the additional Family Tax Benefit payment.
While parents will miss out on the baby bonus, older Australians will benefit from a unique new measure designed to address a housing crisis gripping the country’s ageing population.
More than $110 million will be spent trialing a scheme to help seniors downsize to a smaller home, without affecting their pension.
From July 1, 2014, senior Australians who have owned their family home for at least 25 years and who want to downsize will have the option of investing surplus funds of up to $200,000 in a special account. The funds in the account and the interest they earn will be exempt from the age pension means test for up to 10 years.
The federal government has not opted for wholesale changes to tax rates of brackets in the federal budget.
However, unveiling the budget on Tuesday night, Treasurer Wayne Swan confirmed tax cuts slated for 2015 to compensate for the carbon tax have been ‘deferred’ indefinitely.
A plan to boost Family Tax Benefit A has also been dumped, saving $1.8 billion over three years.
The 0.5 per cent increase in the Medicare Levy to fund the National Disability Insurance Scheme will also apply to all taxpayers from July 2014. Increasing the levy from 1.5 to two per cent will raise $20.4 billion between 2014/15 and 2018/19. A taxpayer earning $70,000 a year would pay $350 a year under the increase.
For jobseekers, the government will lift the income free area under the Newstart Allowance to $100 a fortnight. This is the first increase in a decade and will mean recipients will pocket an extra $494 a year.
Single principal careers will also receive an extra $1600 a year in more support for training under Wayne Swan’s budget.
In a surprise move, smokers will be slugged by higher costs per packet when the federal excise and customs duty is pegged to average weekly ordinary time earnings rather than inflation.
