16 May 2013

Review shows the Household Assistance package is working


Joint media release with
The Hon Greg Combet MP
Minister for Climate Change, Industry and Innovation
The Hon Jenny Macklin MP
Minister for Disability Reform 

A review of the Gillard Government's Household Assistance Package has found it has helped millions of Australian households keep up with their bills and meet the modest impacts of the carbon price.

The Household Assistance Package began in May 2012, with lump sum payments to more than six million Australians, including families, pensioners, self-funded retirees and income support recipients. The package also included tripling the tax free threshold from July 2012, which delivered permanent tax cuts for millions of working Australians.

The first annual review of the package, conducted by the Treasury and the Department of Families, Housing, Community Services and Indigenous Affairs, has found the Government's Household Assistance Package has been adequate and effective. 
Consumer Price Index figures for September and December 2012, as well regulated electricity and gas price determinations, have found the impact of the Carbon Price for 2012-13 has not exceeded the Treasury estimates that the Household Assistance Package was based on.

An analysis of the incomes of low and middle income families has also found that on average, increases in income from March 2012 to March 2013 outstripped cost of living increases over the same period, including the modest cost of living impacts as a result of the carbon price.

The Review also confirmed that on average those on low fixed incomes, such as pensioners on the maximum rate, received assistance through the Household Assistance Package that more than covered the modest impact of the carbon price.

In May 2012, the Gillard Government delivered $1.5 billion in Clean Energy Advance payments to millions of households, including:

  • 1.6 million families;
  • 3.4 million pensioners; and
  • 1.6 million jobseekers and other income support recipients.

In addition, more than 7 million taxpayers earning up to $80,000 a year received a tax cut from 1 July 2012.

Since March this year, more than 3.5 million pensioners (including age, disability and people on Carer Payment) have begun receiving their ongoing Clean Energy Supplement as part of their fortnightly payments. Over a year, these pension increases are worth a total of more than $350 a year for singles and more than $530 a year for couples combined.

More than 1.6 million families who receive Family Tax Benefit payments will start receiving ongoing increases in their fortnightly family payments from 1 July 2013.  Other income support recipients such as students will also receive ongoing assistance, beginning with a second advance payment from 1 July 2013 and an ongoing Clean Energy Supplement from 1 January 2014.

The Household Assistance Package is part of a range of measures the Gillard Government is delivering to help low and middle income households make ends meet.

We have:

  • delivered Australia's first national Paid Parental Leave scheme, including Dad and Partner Pay;
  • delivered an increase to the Child Care Rebate from 30 to 50 per cent of out of pocket costs;
  • delivered the Schoolkids Bonus to help families with the cost of their children's education;
  • delivered higher payments for families with teenagers to encourage them to stay in school;
  • delivered historic reforms to the pension that have delivered increases of more than $5,300 per year for a single pensioner on the maximum rate;
  • provided a separate income support bonus to over one million low income Australians; and
  • delivered three rounds of tax cuts in our first three Budgets and have since tripled the tax free threshold, lifting the rewards of work for all Australians.

By contrast, Tony Abbott has promised that if elected to Government, the Coalition will:

  • axe the Schoolkids Bonus;
  • axe Labor's Household Assistance Package, cutting the payments of more than 3.5 million pensioners and 1.6 million families across the country; and
  • axe Labor's tax cuts, meaning millions of Australian will pay more tax.

Under Labor, these payments are here to stay. Under the Liberals, families and pensioners will be left behind.

The Government has deferred an increase in the tax free threshold from $18,200 to $19,400 due to commence on 2015 as a result of the lower carbon price and the smaller impact on households.

The Opposition's stated policy is to repeal the tripling of the tax free threshold - reducing it from $18,200 to $6,000, increasing taxes for more than 7 million Australians.

The key findings of the review is available on the Department of Families, Housing, Community Serivcies and Indigenous Affairs' website .