FEBRUARY 2009

The Government’s proposed $42 billion ‘Nation Building and Jobs Plan’

The Government proposal contains a variety of measures, from cash bonuses for workers and families, to spending on schools, roads and infrastructure over the next four years.

Bonus payments for families

From March 2009, the government will provide a total of $12.7 billion in cash payments to Australian taxpayers. The table below summarises eligibility for the tax-free cash bonus.

	Taxable income 2007/08 income year	Tax-free cash bonus
	Up to $80,000	$900
	$80,000 - $90,000	$600
	$90,000 - $100,000	$250

The government estimates that 8.7 million Australians will receive payments.
The approximately 1.5 million single income families in Australia who receive Family Tax Benefit Part B (FTB-B) will receive a $900 bonus. These payments will be made automatically by Centrelink from 11 March 2009 for families who receive fortnightly benefits. Those who receive their FTB-B as a lump sum at the end of the financial year will receive their bonus at that time.
Families on low to middle incomes that receive Family Tax Benefit Part A will be eligible for a $900 back to school bonus for each child aged between four and 18 years returning to school.

The government will also provide a $900 training and learning bonus to students and people outside the workforce returning to study who are eligible to receive Youth allowance, Austudy, Abstudy and certain other payments. This payment aims to help with the costs of education and training. A student cannot receive both the ‘back to school bonus’ and the ‘training and learning bonus’.

Boost for the housing sector

The government will spend $6.4 billion to build 20,000 new social housing dwellings, as well as 802 new homes for the Australian Defence Force. This amount will also provide funds to refurbish 2,500 public housing dwellings so they remain available for occupation.

There is also provision of $3.9 billion to provide free non-means tested ceiling insulation (up to $1,600) in 2.7 million homes and increase the solar hot water rebate. The government claims this will cut around $200 per year off the energy bills of these households and reduce greenhouse gas emissions by about 49.4 million tonnes by 2020 – the equivalent of taking more than one million cars off the road.

The non-means tested solar power rebate will also be increased from $1,000 to $1,600 (effective from 4 February 2009 until 30 June 2012) and the low emissions plan for renters rebate will double to $1,000. Households must choose either the insulation or solar power rebate.

Small businesses

Australian small businesses will receive $2.7 billion in temporary tax breaks on the acquisition of tangible depreciating assets. For assets acquired before 30 June 2009, an extra 30% tax deduction is available, while for those acquired between 1 July 2009 and 31 December 2009 the deduction is 10% of the asset’s cost.

Schools

The government’s plan includes spending of $14.7 billion on the nation’s schools. Every school in Australia will receive up to $200,000 for maintenance and the renewal of school buildings. Five hundred needy high schools will receive funds to build new science labs and language learning centres. In addition, every primary, special and kindergarten to year 12 school may receive grants to build or upgrade large-scale infrastructure such as libraries and halls.

Roads and infrastructure

The government also plans to spend about $890 million on a comprehensive roads package.
Of this, $90 million will go towards including 350 additional projects in the Black Spot Program; $150 million to install 200 new boom gates at high-risk rail crossings; $150 million to fund additional regional road maintenance projects and $500 million to fund critical community infrastructure projects such as sports facilities, town halls, libraries and community centres.

Farmers not forgotten

A $900 Farmers’ Hardship Bonus will be paid to approximately 21,500 drought-affected farmers and farm-dependent small business owners that receive exceptional circumstances related incomes support. This package is estimated to be worth $20.4 million in 2008-09.

It’s important to note that this package still needs to be legislated by Parliament in order for these measures to be implemented.

Source: Colonial First State, First Tech Services

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