The Gillard Government will deliver much-needed cost of living relief to millions of Australian households in the 2012-13 Budget, including a new Benefits of the Boom package.
Despite our strong economic fundamentals, many working Australians are struggling with cost pressures and find it difficult to make ends meet.
For some Australians electricity, rents and mortgages, the cost of groceries and petrol are putting serious pressure on family budgets.
This Budget will ensure the benefits of our strong economy and the mining boom are shared with all Australians to help with cost of living pressures.
The 2012-13 Budget puts in place a raft of measures to help people make ends meet, including:
* increases to family payments;
* a new Schoolkids Bonus to help families with the costs of a child's education;
* cost of living support for people on allowances and payments such as Parenting Payment through a new Supplementary Allowance; and
* 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.
Some of these measures will be funded by the Benefits of the Boom package which will ensure the profits from the mining boom are spread to all corners of Australia.
These measures to help deal with the cost of living are good for families, pensioners and Australians on low incomes and will help make ends meet.
As well as this extra help for households, the Government will deliver a surplus that provides a buffer in uncertain global times and continues to give the Reserve Bank room to cut interest rates further if it needs to.
The Reserve Bank's cash rate is a full 300 basis points lower than when the Government came to office, in contrast to the ten rate rises in a row families experienced under the previous Liberal Government.
The current cash rate of 3.75 per cent is lower than at any time under the previous Liberal Government.
A family with a mortgage of $300,000 is now paying more than $3,000 a year less in repayments now than when the previous government left office.
More help for families
As part of the Benefits of the Boom package, more than 1.5 million families who receive Family Tax Benefit (FTB) Part A will receive a boost from 1 July next year.
All families that are eligible for FTB Part A will receive an increase:
* Families receiving the maximum rate or part of 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.
A new Schoolkids Bonus for Australian families
The Government is providing 1.3 million Australian families with children at school with a new cash payment to help make ends meet.
From next year, families will receive a new Schoolkids Bonus worth:
* $410 for each child in primary school; and
* $820 for each child in high school.
This new guaranteed payment will help the families of 2.2 million school kids pay for uniforms, books, school excursions, stationery, and other costs like music lessons and sports registration fees.
Because the payment is automatic and upfront, it means:
* Parents don't need to keep receipts and wait until tax time to receive the payment - it's a guaranteed payment.
* Parents will receive the full amount every time, so families won't miss out if they lose receipts.
* The new Schoolkids Bonus will be paid to coincide with the start of Term 1 and Term 3.
The payment will replace the Education Tax Refund from 1 January 2013.
Under the existing system, 1 million families aren't claiming what they're entitled to - either claiming less than the full amount, or not claiming at all. That's 80 per cent of eligible families.
Replacing the old system with this new Schoolkids Bonus means one million families will receive more cash - a typical family will get more than $720 extra each year[1].
As part of the transition to the new Schoolkids Bonus, the Education Tax Refund for 2011-12 will be paid out in full to all eligible families as a lump sum payment in June.
Extra assistance for some of the most vulnerable Australians
More than a million Australians will benefit from the introduction of a new lump sum Supplementary Allowance to help recipients of Parenting Payment and allowances manage unexpected living expenses.
The payments will be $210 a year for singles or $350 a year for couples, will be indexed by the Consumer Price Index and will be tax-free.
The lump sum payments will be paid twice yearly in March and September - $105 per instalment for singles and $87.50 per instalment for each person who is a member of a couple.
This supplement will help people doing it the toughest who often don't have money set aside to help manage unexpected costs.
Building on a strong record of tax cuts
From July 1 this year the Government is delivering a major tax reform that will more than triple the tax-free threshold and free over 1 million Australians from having to lodge a tax return from 2015-16.
This will mean that regular wage earners with incomes below the new tax free thresholds will get to keep all of their wages in their regular pay packets and won't have to lodge a tax return.
As a result of these reforms, from 1 July 2012, all taxpayers with income up to $80,000 will receive a tax cut, with most getting at least $300.
Further tax cuts will be delivered in 2015-16 for all taxpayers with incomes up to $80,000, with most receiving up to $85, on top of this year's tax cut.
Increases in family payments and pensions
In addition to increases to Family Tax Benefit (FTB) Part A and the new Schoolkids Bonus in this Budget, the Government will also deliver a $6.3 billion package over four years from 2011-12 of increases to payments to households as part of the Clean Energy Future Household Assistance Package of reforms. The maximum rates of pensions, allowances and FTB Part A will be increased by 1.7 per cent.
For example, full and part-rate pensioners and Commonwealth Seniors Health Card holders will receive annual increases of $338 for singles and $255 each for couples, and families will receive further increases of up to $110 per child per year in FTB Part A and $69 per family per year in FTB Part B.
The Government's record boost to pensions - increased again this year's Budget - recognises that senior Australians have worked hard over many decades to make our country strong and deserve all the support we can provide.
The Government's historic pension reforms mean that since September 2009, pensions have increased by $154 per fortnight for singles on the maximum rate and $156 for maximum rate couples combined.
Single income families where the earner's income is between $68,000 and $150,000 will also receive a new Single Income Family Supplement of up to $300 per annum, to recognise that they will get less tax assistance than a dual income family on a similar income.
People holding an Australian Government concession card, or a Department of Veterans' Affairs Gold or White Card who have high home energy costs because they rely on medical equipment will also be able to claim the Essential Medical Equipment Payment of $140 per annum, in addition to any other assistance they receive.
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.
From 1 January this year, the Government increased FTB Part A payments for families with teenagers aged 16 to 19 years in full time secondary school by up to $4,208 per year.
The Government also introduced Australia's first national Paid Parental Leave scheme, increased the Child Care Rebate from 30 to 50 per cent, and introduced the Schoolkids Bonus.
[1]This is based on a family with one child in primary school and one in high school, who did not claim the maximum Education Tax Refund in 2010-11.