The 2013 budget for families

Treasurer Wayne Swan poses for the media with the 2013 budget at Parliament House.
Treasurer Wayne Swan poses for the media with the 2013 budget at Parliament House. Photo: Andrew Meares

We have always put the interests of working Australians first," said Treasurer Wayne Swan in tonight’s Federal Budget speech. While this may be true it is nevertheless a departure from his “working families” rhetoric of previous years. It proved an accurate summation of the Budget initiatives though, with strong focus on encouraging as many Australians as possible to be in the workforce.

The government is operating in the shadow of an $18 billion deficit for the coming year and as always there were gains and losses for most. Here are the main things that parents need to know.

The more:

Kitting out the nursery can also cost some first-timers a sizeable sum.
Kitting out the nursery can also cost some first-timers a sizeable sum. Photo: Natalie Boog
  • $9.8 billion over a six-year period to implement the Gonski reforms (known as the National Plan for School Improvement). This will include “more teacher training, extra resources for school libraries, specialist language assistance, and literacy assessments in the early years.” They have also reassured parents that funding will grow for every school.
  • $300 million to establish an Early Years Quality Fund to help support long daycare centres in their need for well-qualified childcare workers.
  • An increase of approximately $38 per fortnight in the amount that Newstart recipients can earn each fortnight before they begin losing Centrelink benefits.
  • $19.3 billion over seven years for the establishment of DisabilityCare Australia. This will be partially funded by the previously-announced increase of 0.5% in the Medicare levy.

  •  $127 million for older Australians, including $112.4 million to support those downsizing their homes, $9.9 million to extend broadband support and $4.6 million for a new ageing policy institute.

  • $226 million to fight cancer, including $55.7 million for breast cancer screening, $18.5 million for prostate cancer research and $23.8 million for bone-marrow transplants.

 The less:

  • Bye Bye Baby bonus: the government will save more than $1 billion over the next five years by scrapping the Baby Bonus, effective 1 March 2014, and instead boosting FTB A by a significantly smaller amount, being $2,000 for the first child and $1,000 for subsequent children and tightening the eligibility requirements. The government predicts that this will affect approximately 48,000 families next year, with some opting for the paid parental leave scheme and some missing out altogether.
  • Previously announced increases in family tax benefits, worth approximately $1.8 billion (equating to $300 to $600 a year for eligible families) has also been scrapped.  
  • Currently, households with out-of-pocket medical expenses of more than $2,060 in a financial year can claim the amount above this as a 20% tax offset. As an example, households with out-of-pocket medical expenses of $5,000 in one year can receive $588 back as a tax offset. This tax offset is being phased out to help pay for Disabilitycare Australia.  

  • The Medicare safety net threshold will also be increased from $1,221 to $2,000 from 1 January 2015, another action that will potentially increase medical costs for families.
  • The government will defer an increase in the foreign aid budget to 0.5 per cent of the gross national income by one year to 2017-18, saving it $1.9 billion.

The result?

Treasurer Swan is hoping for a “stronger, smarter and fairer Australia.” Over the long term, of course.

There were a swathe of other Budget announcements and you can view all the costings on the Federal Government Budget website.

What do you think of the 2013 budget? Comment below or join the discussion on the Essential Baby Forums.