Australia’s Treasurer Jim Chalmers has announced a $14.6 billion cost-of-living package that will not add to inflationary pressures. The package includes $1.5 billion in energy relief for Commonwealth Seniors Health Card holders, pensioners, and those on income support, which includes Family Tax Benefit (FTB) A and B. However, thousands of Australians will miss out on the payment of up to $500 due to an income threshold cut-off. The FTB varies depending on the number of children a family has, and the income threshold for families with two children is $117,944. The assistance will also vary based on the states, as the Labor government has negotiated eight different energy agreements with the different jurisdictions.
The spending will be largely offset by savings of $17.8 billion, which will be announced by Finance Minister Katy Gallagher on Monday. The package will also be funded in part by a change to the Petroleum Resource Rent Tax, which dictates how much oil and gas companies pay on their offshore liquefied natural gas projects over the next four years. Currently, oil and gas companies are able to fully deduct their project costs against income, but from July 1, 2023, this will be capped at 90 per cent. The change is expected to bring in a $2.4 billion increase over the forward estimates.
Thousands more Australians are also set to benefit from a broadening of the JobSeeker welfare payment following backlash to reports that only those aged over 55 would receive an increase. The expenditure review committee had agreed to broaden the welfare boost, which could represent “up to $40 a fortnight”. Mr Chalmers all but confirmed welfare recipients across the board would benefit.
The government is expected to post Australia’s first budget surplus in 15 years, and Labor’s first since 1989. The surging tax revenue from commodities and a growing number of people in work have helped fuel a $36.9 billion turnaround from the deficit predicted in Labor’s October budget.