Tax cuts flow from budget surplus
The typical Northern Rivers resident who earns $35,000 will be $17.50 better off each week under tax cuts announced in federal Treasurer Peter Costellos 11th Budget on Tuesday night.
The federal government has taken advantage of its budget surplus to drop a little sweetener into most taxpayers pockets from July 1, but like previous budgets, big earners are the big winners.
The tax cuts mean that a person earning $20,000 a year will find an extra $7 per week in their pay packet, while someone earning $30,000 a year will get an extra $17.50. But at $40,000 a year the weekly windfall dips to $9.80.
People earning $70,000 a year and up get the best deal, with weekly tax cuts ranging from around $26 at $70,000 to $119 for those earning $150,000.
Families earning up to $40,000 a year will now be able to claim the maximum amount of Family Tax Benefit A, while those with three children will be now classified as a large family and will receive a $248 supplement per year formerly reserved for the arrival of a fourth child.
Taxpayers earning under $10,000 will no longer have to pay tax, with the threshold increased from $7,567. In addition, the Medicare levy will drop from 20 per cent to 10 per cent for those earning under $10,000.
The 30 per cent tax threshold will be increased to $25,001 while the 47 per cent marginal tax rate will be cut to 42 per cent and the threshold will increase to $75,001. The top marginal tax rate will be cut from 47 per cent to 45 per cent and the threshold will increase to $150,001.
Page MP Ian Causley said the lowering of tax rates and the raising of tax-free thresholds would benefit plenty of Northern Rivers residents.
This is particularly important for workers in Page because of the high numbers of low-to-middle income earners, he said. Another huge boost to Northern Rivers locals is the governments decision to change rules regarding curtilage. From January 2007, retired farmers will have their land excluded from the Age Pension assets test provided they can show a long attachment to their property.
Mr Page said deregulation of the childcare industry and a $60 million childcare boost would lead to hundreds of extra places being made available in the Northern Rivers.
But Richmond MP Justine Elliot disagreed, saying tax cuts announced in the budget had already been spent as families struggled to pay for rising interest rates, soaring petrol prices and increased health insurance premiums. She said this, coupled with cuts to wages and overtime caused by the Howard Governments industrial relations laws, meant the Budget provided very little for the average worker.
It will not provide any extra real childcare places or make childcare more affordable for families already doing it tough, she said. With a teenage unemployment rate of over 36 per cent in our area I am very disappointed that the Howard Government delivered nothing to provide our young people with decent training and job opportunities.
Ms Elliot said the elderly were the biggest losers in the budget.
Tax cuts mean nothing for those on fixed incomes, she said.
However, Mr Causley said pensioners and eligible self-funded retirees would appreciate the governments one-off older Australians bonus payment of $102.80 per household.
For an update on Pacific Highway funding announced in the Budget see page 6.