The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

8 May 2012

Spreading the benefits of the Boom

Joint media release with
the Hon Julia Gillard MP
Prime Minister

The Gillard Government will deliver a $1.8 billion boost to family payments, new tax relief for business and lump sum allowances for struggling Australians as part of a new Benefits of the Boom package that will spread the benefits of the resources boom to all corners of our country.

The $3.6 billion package will deliver much-needed financial relief to families and businesses under pressure in our patchwork economy, through the following measures:

  • A boost in family payments for over 1.5 million families:
  • Families receiving 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.
  • More than a million Australians will benefit from a new lump sum Supplementary Allowance to help recipients of payments such as Parenting Payment and allowances, who will receive $210 a year for singles or $350 a year for couples.
  • Businesses will benefit from the introduction of a loss carry-back scheme, which will benefit up to 110,000 companies by up to $300,000.

The Benefits of the Boom package will be funded by re-directing Minerals Resource Rent Tax revenue intended for the company tax cut. Resource Rent Tax revenue intended for the company tax cut.

The proposed company tax cut has repeatedly been rejected by the Liberals and Greens.

The Government is not prepared to allow the opposition of the Liberals and the Greens to prevent Australian families and businesses from sharing in the benefits of the boom

The Government will therefore redirect the funds to families and company tax relief in a way that helps the economy and especially small businesses.

By providing families with extra money we are also providing a boost to the rest of the economy, especially the retail sector.

At the heart of this package is $1.8 billion in extra support for families through more generous family payments.

The Benefits of the Boom package also delivers tax relief to businesses facing challenges from our economy in transition through a new loss carry-back initiative.

Our economy is strong, we are bringing the Budget back into surplus and there is a mining boom - but it's not everyone's boom.

Many working Australians are struggling and feel it is harder for them to make ends meet.

This Budget will ensure the benefits of our strong economy and the mining boom are shared with all Australians - not just a fortunate few - to help with cost of living pressures.

It will do this while also returning the budget to surplus to build a buffer against global uncertainty and provide the Reserve Bank with maximum flexibility to cut interest rates if necessary like it did just last week.

The Benefits of the Boom package will strengthen our economy by helping businesses struggling in the retail, manufacturing and other sectors due to the high dollar.

Tax Relief for Businesses

From 1 July, the Government will provide further tax relief for companies that report a loss through the introduction of a loss carry-back.

Currently businesses can carry forward losses to future tax years to offset their profits and therefore reduce their tax bills.

Companies that incur losses from 2012-13 will also be able to carry back those losses to offset previous profits so that they get a refund from tax previously paid.

This new initiative will support businesses facing challenges in our patchwork economy. It will encourage businesses to invest and adapt, boosting productivity and strengthening our economy as it goes through a period of major transition.

The Government is also helping to improve incentives for Australia's 2.7 million small businesses to invest, helping to improve their cash flows

From 1 July 2012, small businesses will be able to instantly write-off each and every asset they purchase costing less than $6,500 - a full deduction straight away, rather than waiting.

The first $5,000 of the cost of motor vehicles will also be able to be deducted immediately.

The Gillard Government is committed to further reforms of the business tax system, beyond the important new budget measure on loss carry-back and small business initiatives.

The Government stands ready to deliver a cut to company taxes - fully funded by savings identified by the independent Business Tax Working Group on behalf of Australian business - if that's what the independent BTWG recommends and the Parliament agrees to support.

The final Business Tax Working Group report will be delivered to Government before the end of the year.

Boost to Family Payments

More than 1.5 million families will receive a boost to their Family Tax Benefit (FTB) Part A from 1 July next year.

All families that are eligible for FTB Part A will receive an increase:

  • Families receiving 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.

This assistance builds on the tripling of the tax free threshold, from 1 July this year, delivering tax cuts to all taxpayers earning up to $80,000.

This is the largest increase in the history of the tax free threshold which will mean up to one million people will no longer need to fill in tax returns from 1 July 2012.

Supplementary Allowance

More than a million Australians will benefit from a new lump sum Supplementary Allowance to help recipients of payments such as Parenting Payment and allowances manage unexpected living expenses.

The payments of a total of $210 a year for singles or $350 a year for couples will be indexed by the Consumer Price Index to keep pace with inflation, will not be means tested and will be tax-free.

The lump sum payments will be paid twice yearly, starting in March next year - $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 at their disposal to help manage unexpected costs, like unforeseen car repairs or medical expenses.

The Government has always been committed to sharing fairly the benefits of the resources boom - every step of the way we have been opposed by the Coalition, who have voted to give tax cuts to mining billionaires, rather than Australian small businesses.