Wreckers

Well there ya go $950 per Australian Taxpayer earning less than 80000$ in April. Some more free money to families

Free insulation for homes and more Solar power hot water rebates

And another RBA rate cut of 1%

Who recons that the banks are guna delay passing it on as long as possible?

All I can say is thats guna go a long way towards paying for my new 52 inch TV, Aircon and Solar power pannling.

is that after investment writeoffs on tax ?

I hope I qualify could use some cash

Well there ya go $950 per Australian Taxpayer earning less than 80000$ in April. Some more free money to families

Prime Minister's Release

The Prime Minister's Release is saying $100,000 or less so that is even better.

After speaking with a few guys at work I am expecting the banks to pass on this rate decrease in full. I see them receiving to much pressure from the government and reserve bank after the amount of record amount of profit they have managed to attain during these hard times Especially the Commonwealth Bank.

Still, as much as I hate the banks....check out Iceland's economy... their banks are screwed and so is their economy now....

Westpac's already announced a full passing on of the reduction.

The credit crunch has eased and funds are more readily available, furthermore there have been reductions globally in the most recent period.

What is playing now is that people are shy about debt, so any ability to further reduce rates and entice borrowers will likely be taken (some institutions may struggle with funding costs to compete but probably none of the Australian ones).

The package is interesting - seems they're going to pay it via the PAYG system - I'm not sure how that will work but they obviously have a plan. Quite a lot will likely go toward debt reduction for some, but the idea seems to be that if enough people spend it and other cash as a result of a boost in confidence, it will help to maintain some positive growth.

It'll be interesting if we can avoid a technical recession (2 or more consecutive quarters of negative growth). If we do, we may be among a very few (maybe even the only) OECD nation to manage it. That could be interesting for investment in Australia which could have additional benefits.

If the package (and there's more to it of course) is that successful, then in 18-24 months there will likely be real pressure on inflation (something that is not currently apparent thankfully) and it's possible that a very fine balancing act will then be needed to maintain recovery/growth without exploding inflation (which would just undo all the good work and bounce us backward).

Unemployment, despite all the stimulus, is still expected to reach 7% in 2010 compared to the 4.4% in December 2008 - a 59% increase in the level. From 498,000 to 793,000 or an additional 294,000 people. There's a lot of reason to be optimistic that we will weather this far better than a lot of places, but there will be tough times for everyone ahead.

The key really is to remain positive - the situation will improve and a better level of balance should be achieved (this is what happens after corrections). It's not disimilar to Keating's "The recession we had to have" in that the long term benefits of fixing problems were very real.

As expected with a 1% reduction in official rates, the AUD is down against most major currencies, although there seems to be a combination of profit taking and some positive reaction to the stimulus package showing some late gains. The trend, though, will be down to reflect the lower interest rates in the short to medium term, remaining reactive to changes in interest rates in other major economies and our smaller trading partners (reductions in those rates could see upward pressure on the AUD).

The Prime Minister's Release is saying $100,000 or less so that is even better.

After speaking with a few guys at work I am expecting the banks to pass on this rate decrease in full. I see them receiving to much pressure from the government and reserve bank after the amount of record amount of profit they have managed to attain during these hard times Smile Especially the Commonwealth Bank.

its 950 for people under 80000

2 other smaller amounts between 80000 and 100000

90000 - 100000 = 300$ 80000 - 90000 $600 or something

Single income families get something out of the deal also depending on family benifit schedules.

They really should just cut the damn income tax rate instead of handouts. Handouts are easy for government to do but less beneficial in the long term.

I spend fair bit of money fixing up my house even I am not in Australia yet, so family can be ready to move back in. So I can say I did my bits for the economy

So if they use the PAYG scheme for the $950 pay out - will they apply tax to it?
Considering the Prime Minister's statement doesn't specify I'm guessing so...

Aedryen wrote:Still, as much as I hate the banks....check out Iceland's economy... their banks are screwed and so is their economy now....

Are you aware that the Iceland banks funded purchasing of half of the poorly run large companies in Scandinavia? It's been a standing "joke" in Denmark for 3 years at least, that it was probably the Icelanders who bought it, if a company you couldn't understand anyone would want, was taken over.

Iceland is a volcanic island. Their economy was based on hot air. That's all there is to it.

It's tax free, Nys.

Creac wrote:It's tax free, Nys.

WOOT!

If it goes through...

Those set to benefit:

Working Australians

The bonus will be available to Australian resident taxpayers who paid tax in the 2007-08 financial year after taking into account available tax offsets and credits.

• $950 bonus will be paid to people earning up to and including $80,000.
• $650 bonus will paid to people with earnings over $80,000 and up to $90,000.
• $300 bonus will be paid to people earning more than $90,000, up to and including $100,000.

Single Income Families

• $950 up-front, one-off bonus payment to families on Tax Benefit Part B (FTB-B).
The payment, which will be made automatically by Centrelink in the fortnight commencing 11 March 2009, will be non-taxable and will not be counted as income for social security purposes.

The small number of families who claim FTB-B as a lump sum, will receive their one-off payments from Centrelink in 2009-10 and 2010-11 after their 2008-09 tax returns have been processed by the Australian Taxation Office.

Families who are eligible for FTB-B on 3 February 2009 will receive the Single Income Family Bonus.

Farmers

• $950 will be made to people who (on 3 February 2009) are receiving:

Exceptional Circumstances Relief Payment for Farmers;
Exceptional Circumstances Relief Payment for Small Business;
Interim Income Support for Farmers;
Interim Income Support for Small Business;
Transitional Income Support;
Farm Help Income Support.

The payments will be made in the fortnight commencing 24 March 2009. These bonus payments will not be taxable and will not be counted as income for social security purposes.

School kids

• $950 Back to School Bonus to be paid to families eligible for Family Tax Benefit Part A (FTB-A) on 3 February 2009 for each eligible child of school age (aged 4 to 18 on 3 February 2009).

Students

• $950 bonus for people who already receive Youth Allowance (students and apprentices); Austudy; ABSTUDY and related payments. This payment will also be available to recipients of Sickness Allowance and Special Benefit (under age pension age). If a student attracts the Government's Back to School Bonus they are not eligible for the one-off $950 Learning and Training Bonus

• $950 temporary supplement (from 1 January 2009 to 30 June 2010) to the Education Entry Payment (EdEP). This is on top of the existing EdEP payment of $208, which provides assistance with the costs of training courses, for income support recipients who are returning to study.

Apparently the opposition are going to vote against it, arguing that tax reduction would be a better solution

It's a little more complex than that, but yes Turnbull has flagged potentially voting against it at the moment and in the current form pending further review etc.

The Greens have also indicated they want some changes / a senate review and it appears that Family First are positioned similarly. It will really depend on what support Rudd can get from the minors or if he can make changes that will bring the Opposition to the table.

Whilst we might all complain about not getting the cash, in reality the opposition and minor parties are doing what they are supposed to do - check and question legislation and policy. A strong opposition leads to strong policy and legislation - it's in the timing and the politics involved in debating the issues and seeking changes that we decide if it's just effective opposition or ego tripping.

So far, I'd say it's the normal start with no indication one way or the other.

I still haven't seen how they intend to make payments through the PAYG system. It's obviously not a case of sending out cheques (people may have moved since last tax return), or crediting bank accounts (you don't have to give your TFN on an account if you don't want to) and the timing means they're not waiting for you to file your return in order to receive it. Somehow, it seems, they will provide a credit to employers through PAYG to be paid to employees. Seems feasible, but I wonder why we haven't seen details of the exact mechanism.

Technically, not everyone needs to have filed a tax return yet for last financial year, so if they haven't completed and had accepted a return, how are they determining income? The ATO can obviously just run some numbers based on individual TFNs and PAYG installments but that wouldn't take into account all the various adjustments possible.

For social welfare recipients, it's easy - there already exists a process for making regular payments to these people.

Ah, cool - good info - thanks.

If you ask my opinion:

Economic Stimulus = Cheap Dildo

So there

MeloxXx

Fairly accurate in some cases, Melo, as this stimulus could turn around and fuck us by increasing debt levels for the government which will drain capital from future growth.

If it passes, I'm seriously tempted to see if there's some way to reject accepting it. I'm fine with investment in education and such - regardless of economic stimulus - but I think that increasing demand through one of bonus payments typically does a lot more for debt reduction in the short term and some less then productive investment in small (economically) capital purchases for individuals. That's fine in an of itself, but with the Australian economy being much better placed than many, bringing forward tax cuts makes far more sense as it drives confidence of continued income.

If you reduce business tax, you also potentially assist employment levels as holding staff for future growth becomes a more acceptable expense even with lower turnover etc.

The tax cuts are already scheduled so there's already a long term expectation by government that they won't have the funds, so bring them forward. It also encourages people to be working in order to receive the benefit. Definitely target it at the lower and middle income earners in the main if that's what you want (although for a general injection you're more likely to see those with disposable income disposing of it more readily than those who are struggling).

But more than anything we need consumers and business to feel confident about re-entering the market and we need the federal government to plan a return to surplus as soon as possible (nothing wrong with short term deficit) and that has been the position of the previous and the current government (to favour a surplus) so I see no problems there. Confidence is restored when there's a feeling of long term sustainability and tax cuts tend to do that (and given we're not operating massive deficits, the revenue reduction is sustainable).

Of course, reductions in government waste would help make funds available for more infrastructure, but governments of all political bents are rather shy about reducing the level of their toys.

If it passes, I'm seriously tempted to see if there's some way to reject accepting it.

Just give it to me.

If we get it it'll just go straight on my credit card /shrug.

Exactly, Mica, which doesn't serve to stimulate the economy as such.

mine will upgrade my PC

Creac wrote:Exactly, Mica, which doesn't serve to stimulate the economy as such.

I know, but there is a reason for it

I didn't get anything from the last handout and I won't be getting anything from this.

Last time, when they were busy handing out payments to everyone else in the community, they managed to slash over $35/fortnight off my mobility allowance. Wonder what they will take away from me when the next handouts go through?

yeah just can't trust governments