WORKING mother of two Crystal Evenden, of Capalaba, is pleased Federal Treasurer Wayne Swan’s first budget, handed down on Tuesday evening, rewarded lower income working families through a $55 billion Working Families Support Package.
From July 1, a worker earning the average annual wage of $48,000 will be $20 a week better off through tax cuts designed to reduce personal income tax by $47 billion over four years.
Income thresholds for the Medicare Levy Surcharge will increase from $50,000 to $100,000 per year for singles and from $100,000 to $150,000 a year for couples.
The Government’s Child Care Tax Rebate will increase from 30 per cent to 50 per cent, with the payment cap rising to $7500, up from $4354 – a jump of 72 per cent.
A new Education Tax Refund will allow eligible parents to claim a 50 per cent refund on eligible education expenses for children in primary or secondary school – up to $375 for a primary school student and up to $750 for a secondary school student.
Housing assistance will be provided through the introduction of First Home Saver Accounts in which the first $5000 of individual contributions will attract a Government contribution of 17 per cent, with earnings being taxed at 15 per cent and withdrawals tax free if used to purchase or build a first home.
Although providing extra assistance for lower-income working families, the budget will eliminate several benefits for wealthier Australians.
An income test will apply from July 1 and Family Tax Benefit Part B will not be available to families in which the principal earner’s annual income is more than $150,000.
The Baby Bonus, which will rise to $5000 from July 1, will be means tested from January 1, 2009, and axed for families earning more than $150,000 per year.
Also from July 1, the tax rate for luxury vehicles will increase from 25 per cent to 33 per cent.
Ms Evenden said Mr Swan’s budget was “good news” for working families.
“It sounds good and anything that comes back to us at the end of the year is a good thing,” she said.
“Things are tight for working families.
“Food, petrol and rent has all gone up but our pays haven’t and when my pay and my husband’s pay is allocated at the end of each fortnight, the money just goes.
“These extras should help a lot.”
Liberal Member for Bowman Andrew Laming called the budget a “high spending, old fashioned Labor Budget” that would not fight inflation.
“The only bright light in which we can all take comfort is the strength of the Australian economy and the cuts in personal taxation, all courtesy of the previous Coalition Government,” he said.