SUBJECTS: $10.4 billion Economic Security Package
LUKE BONA:
Chris Bowen knows how many families are suffering in Sydney's west, in his role as the Federal Member for Prospect and of course as Assistant Treasurer, he's right across the bigger picture as most Australian's tighten their belts in this global economic crisis.
Well tomorrow is shaping up as a good day for many Australian's with the launch of what's being build as a stimulus package, $10.4 billion dollars will be forthcoming from the Government to help buffer Australians across the current crisis. There has been a lot of discussion has there not as to how Australians should be spending the money. Chris Bowen is on the line to explain who will benefit he's on the line now, good morning.
CHRIS BOWEN:
Good morning good to talk to you
BONA:
Good to talk to you, $10.4 million sorry, I said billion before didn't I?
BOWEN:
Yeah but your right it's a $10 billion dollar package.
BONA:
It is billion sorry, its written million here the second time. $10.4 billion and it should make a lot of difference.
How do you and the government think we should spend or people who are receiving this money should spend it?
BOWEN:
Look that's a matter for people to make their own decisions on. We actually think people should be trusted to make their own decisions obviously it's a stimulus package so we expect a large chunk of it to flow through to spending.
Some people will decide that its in their own interest to pay down their credit card a bit or put it in the bank and of course people should make that decision based on their own interests. In some peoples case that will be the most appropriate things to do and other people's case there might be something that they have been trying to save for they haven't quite managed to save for it and this will provide them with a capacity to spend the money.
So really what it is about putting $10 billion dollars back into the economy that wasn't there before some people will spend it some people will save it but the end of the day it will improve liquidity in the economy which is a problem at moment, banks having trouble borrowing money offshore and it will provide a boast of confidence and spending and that's what its all about.
BONA:
Alright let's run through how the money will be delivered $4.8 billion for an immediate down payment on long term pension reform.
BOWEN:
That's right a bonus to pensions, $1,400 for single pensioners and $2,100 for couples and importantly this for the first time applies to disability support pensioners who missed out in the past, as well as carer payment recipients and of course age pensioners as well as the various veterans and widow pensioners.
BONA:
$3.9 billion in support payments for low and middle income families.
BOWEN:
Yes that's right $1,000 per child for families that receive the family tax benefit 'A'. Now that's the vast majority of families and it doesn't matter whether you get your family tax benefit as a lump sum or over the year you'll receive the payment and the
cut-off, as I say, the cut-off for family tax benefit part 'A' is quite high so it will apply to the vast majority of families.
BONA:
What if you have children that are being brought up by a mother and a father who not living together and they say 'dual custody'?
BOWEN:
There are arrangements in place for that and if anybody has an enquiry on how that particularly applies them, there is a number they can ring, which is 136150. Basically the in certain circumstances it depends who has the bulk with the expenses and bulk with the time with child, but there are break ups to take into account those situations and people can ring that number if they have any enquiries on how it will effect them in that situation.
BONA:
$1.5 billion dollars investment to help first home owners buy a home we knew about that.
BOWEN:
Yes, that's right an increase in the first home owners grant $14,000 dollars if your buy an existing home and $21,000 if you buy a new home and of course that's time limited people have to buy their home or at least enter into contracts to try and make sure our construction industry which is so important. So many tradesmen and other people relying on the construction industry so it's a stimulus package for that particular part of the economy.
BONA:
When will people start receiving cheques?
BOWEN:
From tomorrow they will start receiving the money in the bank account, now this is an important point and thanks for asking not all the money will arrive tomorrow as you can imagine, you don't just press a button and presto $10 billion dollars transfers. Most of the money will be out this week for example by Thursday, Wednesday and Thursday there will be $4 billion dollars paid into peoples accounts, by Friday it will be $5 billion dollars and the remaining $3.5 dollars will be paid by the 19th of December. So people will find the money appearing in their accounts pretty close to the day that their normal payment comes through.
Now if people haven't received their by the 19th of December then they can ring Centrelink but we would encourage people to wait until their normal payment date or certainly until the 19th December and then ring because the money will be flowing over that fortnight, it won't all be appearing tomorrow. So people shouldn't panic if they go down to the bank tomorrow and the monies not there it will be coming pretty close to their normal payment date over the next fortnight.
BONA:
Now what do you think people will spend the money on? It's just before Christmas I'm assuming people will probably buy presents and food for Christmas.
BOWEN:
Look, certainly pensioners I think who have been doing it very tough and you know many pensioners have said things are so tough they haven't been able to afford presents for their grandkids etc. I think you'll see a lot of expenditure on that and that's a good thing. Families of course, the normal household expenditure, household items tend to breakdown and trying to replace them is difficult, so you'll see some expenditure on that and other people will make the decision that the best thing in their financial interests is to pay down their credit card pay off a bit of debt and try and get themselves back in front that way.
BONA:
I think it was the Mayor of Dubbo that was saying towards the end of last week, he was concerned that people in that area will be sending it on grog. I mean do you find that insulting?
BOWEN:
We do have income management arrangements in place for some people where there are issues like that, and they will be apply also to these payments where there are particular cases of concern, but look I take the view people should be trusted to spend their own money, in their own interests, it is at the end of the day, its tax payers money being paid back to people doing it tough in the community and people should be trusted to spend the money wisely and I'm not here to say look you shouldn't spend it on this or shouldn't go down to Harvey Norman or you shouldn't pay of your credit card. People should be trusted is my bottom line, to spend the money of course there'll be some at the end of the day who don't spend it wisely but that's the way our system works. It's really giving people the chance to make their own decisions.
BONA:
Neil from Macquarie Fields has a query for you, yes go ahead Neil.
CALLER:
I'm on the TPI pension and I've had the service pension and the health card taken off me, how do I get on for getting any of the money that the Governments giving out?
BOWEN:
Look there's a special number Neil for veterans to ring 133254.
BONA:
Just repeat that if you can Chris...
BOWEN:
Sure. 133254 was the number for Veterans. Now just running through it and its probably best if Neil can ring that number but recipients of the veterans pension so that's the 200 000 veterans affairs service pensioners the 112 000 wife and widow pensioners and bereavement allowances and the 85 000 veterans support supplement recipients all will receive the money, as well as the 320 000 people who hold the commonwealth seniors health card and the veterans gold card. They'll all receive the bonus but where there are particular cases - I don't confess to be an expert on every particular individual - its best to ring that number for veterans, which is 133254, and they'll be able to work you through all the issues.
BONA:
Yeah 133254, alright well thanks for joining us, lets hope that people spend the money, lets hope that the money that they spend brings them joy and happiness.
BOWEN:
Absolutely. There's lots of people doing it tough this has this package has two purposes one to stimulate the economy and two to help those people who have been doing it tough.
BONA:
Alright thanks for your time Chris Bowen.
BOWEN:
Pleasure.