There are 2 parts to the government’s new stimulus package – payments to low and medium income earners, to boost consumption demands to stimulate production, and spending on infrastructure, to stimulate heavy production – all to boost and maintain employment.Measures
The Government will provide $12.7 billion to deliver an immediate stimulus to the economy to support growth and jobs now before investment spending and lower interest rates take effect.
These measures include:
- an $8.2 billion Tax Bonus for Working Australians,
- a $1.4 billion Single-income Family Bonus,
- a $20.4 million Farmer’s Hardship Bonus,
- a $2.6 billion Back to School Bonus and
- a $511 million Training and Learning Bonus.
The Bonus of up to $950 will be paid to Australian residents who paid tax for the 2007-08 financial year after taking into account available tax offsets and imputation credits. The Bonus will benefit 8.7 million taxpayers.
The Bonus is subject to an income threshold. Eligible taxpayers will receive a bonus of:
- $950 if their taxable income is up to $80,000;
- $650 if their taxable income exceeds $80,000 to $90,000; and
- $300 if their taxable income exceeds 90,000 to $100,000.
Taxpayers will not need to apply. These payments will not be taxable or included as income for social security purposes.
Single-Income Family Bonus
A $950 one-off bonus payment to around 1.5 million families who, on 3 February 2009, are eligible for Family Tax Benefit Part B (FTB-B).
For those families that receive fortnightly instalments of FTB-B, the Bonus will be paid automatically by Centrelink in the fortnight commencing 11 March 2009. The Bonus will not be taxable or included as income for social security purposes.
This payment is designed to provide additional assistance to families with children that have one main income earner and who may receive less benefit from the Tax Bonus than dual income families with similar household incomes who will be entitled to two Tax Bonuses.
Farmer’s Hardship Bonus
A one-off bonus payment to farmers and small business owners receiving Exceptional Circumstances related income support.
A lump-sum payment of $950 will be made to people who, on 3 February 2009, are in receipt of these payments.
The payments will be made automatically by Centrelink in the fortnight commencing 24 March 2009, to approximately 21,500 recipients, providing additional support to groups of Australians who are in hardship.
The Bonus will not be taxable or included as income for social security purposes.
Back to School Bonus
Back to School Bonus will provide a one-off bonus of $950 per school age child (age 4 to 18) to families who are eligible for Family Tax Benefit Part A as at 3 February 2009.
The Bonus will not be taxable or included as income for social security purposes.
The Bonus will assist over 1.2 million families in meeting the cost of educating their children in these difficult times. In doing so, it will provide an immediate boost to consumption.
This support is in addition to that already provided through the Education Tax Refund.
Training and Learning Bonus
The Government’s Training and Learning Bonus has two components.
First, it provides a one-off bonus of $950 to students and to certain other income support recipients at 3 February 2009 to assist with education costs for the 2009 academic year. The payment will be made automatically by Centrelink in the fortnight commencing 24 March 2009.
Second, it provides a temporary additional incentive for eligible social security recipients to return to education and training (from 1 January 2009 until 30 June 2010).
This incentive is in the form of a $950 temporary supplement to the Education Entry Payment, which provides financial assistance to commence approved training and education courses.
The Education Entry Payment will be temporarily available from 1 January 2009 to 30 June 2010 to people who have been receiving eligible benefit payments for one month or longer and also has been extended to Youth Allowance (other) recipients.
The Bonus will not be taxable or included as income for social security purposes.
AND
"The Government is taking decisive action to strengthen growth and support jobs through a $42 billion Nation Building and Jobs Plan."
"The Plan will help support and sustain up to 90,000 jobs over the next two years."
"The economic impact of the Plan is that GDP growth is expected to be around ½ per cent higher in 2008-09 and around ¾ to 1 per cent higher in 2009-10 than it would have been without the Plan.
The forecasts are contingent on there being no further deterioration in global economic conditions. Should the global recession significantly worsen, the Government stands ready to take further action."
The Nation Building and Jobs Plan delivers a fiscal stimulus package of about 2 per cent of GDP in 2009.
The Plan represents a landmark investment of $28.8 billion in schools, housing, energy efficiency, community infrastructure and roads and support to small businesses.
- The Building the Education Revolution program will invest $14.7 billion in primary school infrastructure and maintenance, secondary schools maintenance and to bring forward the funding of trade training centres.
- $6.6 billion will be allocated to boost the national stock of community housing by 20,000 and for the construction of additional defence housing.
- The energy efficiency of Australian homes will be enhanced, contributing to reduced greenhouse gases, through a $3.9 billion program to provide free ceiling insulation for home owners, additional assistance to landlords to install insulation as well as increasing solar hot water rebates for households.
- $890 million will be allocated to repair regional roads and black spots, the installation of boom gates at rail crossings and regional and local government infrastructure.
Small businesses will be able to claim a 30 per cent deduction for the cost of eligible assets costing $1,000 or more that they acquire from 13 December 2008 to 30 June 2009 and install by 30 June 2010.
For eligible assets costing $1,000 or more that they acquire from 1 July 2009 to 31 December 2009 they can claim a 10 per cent deduction if they are installed by 31 December 2010.
Other businesses can receive the same deductions for eligible assets greater than $10,000.
This trebles the investment allowance announced in December 2008.
"This direct investment in the nation’s infrastructure will bring lasting benefits to the economy."
To maintain stability and reinforce confidence in the financial sector, the Government has already:
- introduced government guarantees for deposits and for wholesale debt securities issued by authorised deposit-taking institutions;
- directed the Australian Office of Financial Management to purchase a total of $8 billion of residential mortgage-backed securities; and
- announced measures to assist with car dealer financing and
- announced measures to provide liquidity support to viable major commercial property projects in Australia.
The Australian Business Investment Partnership
The Government will establish the Australian Business Investment Partnership (the Partnership) as a temporary contingency measure to provide finance for commercial property, where traditional financiers withdraw from debt financing arrangements due to abnormal conditions in global capital markets.
The Partnership will initially be capitalised at $4 billion, with the Government contribution of $2 billion matched by an equal contribution from Australia’s four major banks. The initial $4 billion capitalisation could be extended via the issuance of government guaranteed debt to create up to $30 billion in loanable capital.
The Partnership will only provide financing on fully commercial terms for commercial property where the underlying assets, and the income streams from those assets, are commercially sound. The Partnership will support the commercial property assets of viable Australian businesses. Without financing, these businesses could be forced to retrench thousands of employees.
The commercial property sector employs about 150,000 people in Australia. Without action, a combination of weak demand and tight credit conditions could see up to 50,000 people in this sector lose their jobs, with flow on effects to jobs in other parts of the economy.
Small and medium size businesses which service the commercial property sector could also be devastated by weak demand and credit markets.
The Government is also leveraging its strong balance sheet to take the fiscal action that is necessary and responsible. The $10.4 billion Economic Security Strategy and the $300 million program to build local community infrastructure is already providing support for growth in the short term.
To support long run productivity and growth, the Government has delivered a $15.2 billion COAG package and the Nation Building package announced in December 2008 which will strengthen investment in road, rail, health and education infrastructure. Tax relief has been provided to assist Australian businesses.
