FEDERAL BUDGET Parents win with tax breaks

WORKING parents on middle incomes who have young kids are the biggest winners in this budget.

These households are set to receive tax cuts of $1000 a year on top of even larger amounts of recently legislated childcare fee help.

Most of the tax relief in this budget is paid as a lump sum — like the bonus your boss might have given you in the good old days.

Delivering the cuts in this way should encourage them to be spent, which is what the government wants to help boost economic growth.

There are hardly any losers from the key measures in this pre-election budget, which hands back billions of dollars of tax revenue that until recently Scott Morrison did not expect to have.

“ScoMo” is enjoying a J-Lo moment. As Jennifer Lopez sings in her hit Jenny from the Block, he used to have little (extra tax revenue) now he’s got a lot — over four years it’s about $35 billion more than Treasury anticipated in December’s mid-year economic update. Most of that is windfall tax revenue.

From inside the lockup last night PwC economist Jeremy Thorpe said: “It’s as if the Treasurer has found $35 billion down the back of the sofa and decided to spend $15 billion of it on tax cuts and save $20 billion for budget repair.”

The former Treasury boffin’s exclusive analysis (left) can be used to work out how the budget affects you. First, find the household type closest to yours then pick the nearest total income level.

The figures are annual comparisons between a nochange scenario and the net impact of the main hip-pocket measures. They show how each type of household is affected next financial year and the year after.

The results cover new proposals including the expansion of the low-income tax offset to middle income earners, raising the 32.5 per cent tax threshold from $87,000 to $90,000 and continuing the freeze on family tax benefits.