Budget 2012: What it means for you

The 2012-13 budget has just been released by Treasurer, Wayne Swan and there is plenty of good news for individual Aussies.

At Mozo, we are really only interested in how the new budget will affect you, so we will leave all the grumbling, politicking semantics to everyone else.

Families and low/middle income earners are set to be the big winners of the new budget, with a range of initiatives designed to “ensure the benefits of the boom are spread to families across Australia” and to offset the increased cost of living to come from the carbon tax.

Here is the breakdown:

  • The tax-free threshold is to be raised from $6,000 to $18,200, meaning up to 1 million Australians will no longer need to lodge a tax return (July 1 2012)
  • Around 1.1 million families will receive an increase of at least $300 per year and around 690,000 families with two or more children receiving $600 per year from 1 July 2013 (Family Tax Benefit Part A).
  • New Supplementary Allowance for the unemployed, students, and parents with young children: providing a yearly allowance of $210 for singles and $350 for couples, paid in two instalments, with the first payment to commence on March 2013
  • A new Schoolkids Bonus, paid directly to eligible recipients (up to $820)
  • Modest tax cuts (typically $5.80 a week) will be limited to those earning under $80,000 a year and should merely offset future increases in energy prices.

  • For higher income earners, the news is not so good, with a doubling of tax on super contributions for individuals earning over $300,000 to 30% as well as means testing on the private health insurance rebate for singles earning over $83,000 and families on more than $166,000.

    Baby boomers aiming to fill up their super before retirement will have their concessional contributions (the ones they get a tax break on) halved to $25,000.

    Here is a look at the government's estimated improvements to real disposable incomes for different household types as a result of the new budget. Be aware that the table is comparing 2007-08 to 2012-13 so not a perfect measure, but definitely worth a look to see what you might expect come next year.