Show Me The Money!

After months of sombre talk about the need for Australians to buckle down and start scrimping and saving, the Government has made a stunning about-face. With the economy slowing faster than expected, Rudd and co. have decided to crack open the nation’s piggy bank and send us out to spend, spend, spend.

Yesterday they announced a $10.4 billion stimulus package, effective immediately, which sees pensioners, carers, families and first-home-buyers as the big winners.
So are you eligible for a slice of the pie? Let’s find out.

Low and middle income families
You’ll receive a one-off lump sum $1000 per child from December 8 for families. Only families who receive Family Tax Benefit A or those with dependent children receiving Youth Allowance, Abstudy or Veterans Education Scheme payments will be eligible. In general a family with two children will have to earn less than $111,082 to qualify, those with one child will have to have a family income under $100,801. Only children born before October 14 are eligible for the $1000 lump payment.

First home buyers and builders
The First Home Buyers Grant has doubled to $14000 for an existing home purchased between now and June 2009. The First Home Buyers Grant tripled has to $21,000 for a newly built home purchased between now and 2009.

To be eligible, you must buy your home between now and June 30, 2009. Only contracts signed on October 14 and up until June 30 2009 are eligible.

Likewise, newly built homes must have a signed contract to be built before June 30 2009.

Disability pensioners and carers
Those receiving the Carer Allowance will receive a one off lump sum payment worth $1000 for each eligible person they care for. They will receive a lump sum 1400 ($2000 for couples)plus the $1000 lump sum available to those on the
carers allowance. The disability pensioner they care for will also get a $1400 payment.

Everyone else
Old-age pensioners and veterans will also be receiving significant bonuses. In addition to the lump sum payments, 56,000 new training places are to be created. Spending on big building projects in health and hospitals, education, transport and communication are to be brought forward.

So what should you do with it? Well, it’s your money. The government would like you to spend it to boost spending over the Christmas period, or pay off your debts to alleviate the credit crisis.

Response

Immediately after Rudd’s announcement, the Australian dollar rose to 71 cents and the Australian share market made significant gains. But these were eroded this morning after another Wall St slump. Treasurer Wayne Swan has warned that the stimulus will take a while to kick in.

Nevertheless, the bailout package has been endorsed by both sides of government. Opposition Leader Malcolm Turnbull said, “”It will provide a stimulus to the economy, that’s for certain, but warned it might boost inflation and force the Reserve Bank to increase interest rates.

“But nonetheless we’re not going to argue with the composition of the package or quibble about it, it has our support,” he added.

Greens leader Bob Brown said, ‘Greed got us into this crisis, green will get us out of this crisis’ , arguing that Rudd was missing an opportunity to install solar hot-water heating in all homes, fix public transport and boost the alternative energy sector.

A poll conducted on The Australian website showed that the majority of respondents thought the stimulus package was just right (49%), while 19% thought it wasn’t enough and 33% thought it was too much.

Meanwhile Crikey correspondent Bernard Keane wonders what will come of the “future proofing” budget surplus and all the planned infrastructure projects.

We wonder how far down the list paid maternity leave will be next budget.

One thing everybody seems to agree on is that the future is still very, very uncertain.

Links
Confused about lump sum payments? Try the Centrelink website.
First home buyers: Select your state here to find out what you are eligible for.