Wayne Swan’s 2012-13 battler’s budget was released last week to very mixed reactions and a lukewarm reception. The promised surplus budget only reaches a modest $1.5 billion, although this is expected to rise to a healthy $7.5 billion within the next three to four years. The savings are moderate, with most done through the slashing of a company tax rate cut earning $4.8 billion dollars in savings. Other big savings include the slashing of foreign aid and the scrapping of standard tax deductions. These savings however are going towards lots of government spending so that ‘benefits of the boom were spread around the country’ says Families and Community Services Minister Jenny Macklin.
One of the major spendings in this years budget is the boost to family tax benefits from July next year. Middle to low income families with both primary and secondary school aged children stand to receive lump sum payments and annual benefit payments of up to $600. The amounts lessen as the household income increases. The most any one family can stand to receive is over $1380. Also in place is the new ‘SchoolKids Bonus’ that was announced within the budget. This will provide 2.2 million households with once yearly payouts of either $410 or $820 for each child in Primary or Secondary school. Designed to ease the cost of education, the money is intended to help families buy uniforms, books and send children on regular school excursions. It will cost the Labor government an extra $2.1billion over the planned five years of implementation. However, there is no regulatory statute in place that will dictate how this money is to be spent. With $1.5 million families across the nation being eligible for the family tax benefit A scheme, there is potential for that money to be injected back into the economy. Although it is designed for the education system, more than 40% of families may use the money in other ways that are not intended.
Low socio-economic households are the most at risk of spending the benefits on unintended goods and services. ‘A significant proportion of the families here are living just above or below the poverty line’ explains Susan Gilmore, Principal of Churchill Primary School ‘the parents are usually uneducated, not having finished high school and as such do not value the education of their children above their own needs, it wouldn’t surprise me if alcohol and tobacco sales increase when these benefits are handed out. It won’t help the kids and that’s something i am very concerned about’.
There has been no dicussion whether the Government will put into place restrictions so as to control the areas into which the money is injected. ‘Time will only tell how well the Labor Government can implement this plan. It sounds too good to be true.’ Says Mrs. Gilmore ‘I hope for the sake of the children it’s supposed to be benefiting it isn’t’.