Tomorrow’s Budget will include a sweetener in the form of extra cash for families with school-age kids, a move welcomed by struggling retailers.
The Government announced yesterday that the Budget would include a handout of hundreds of dollars to 1.3 million families with school-age children, ahead of higher prices from the July 1 introduction of the carbon tax.
The existing refund for school expenses will be replaced with a ‘‘Schoolkids bonus’’ of $410 a year for each primary school child and $820 for high school students.
It turns a rebate that required receipts, and one that many families failed to claim, into a general payment.
The bonus will start next January and will be paid twice yearly.
However, all eligible families will receive a lump sum next month for their existing entitlement for 2011-12 without having to produce receipts or make claims.
Treasurer Wayne Swan said: “I think it will be welcomed by families who do it tough, you know, at various stages through the school year.
“It gets pretty hard when you’re going out there and buying all of the kit and the gear. This will be there for them when they need it,” said Swan.
“That will be, not just be good for families; because the cost of education tends to really hit the family budget, that will be good for business too.”
The Australian Retailers Association told SmartCompany retailers welcomed the announcement of the Schoolkids Bonus.
“Anything that makes the consumer feel a bit more secure financially from a retail perspective is good,” says ARA president Roger Gillespie.
“The last time the Government handed out money to consumers during the global financial crisis it gave retail quite a boost, so I assume this will do the same.
“If the public perceives the future is brighter they may loosen their purse strings.
However, Gillespie warned that any positive impact depended on the other announcements to come in tomorrow’s Budget.
“If it is a boost on one hand and taking away in the other, then the net result may be neutral,” says Gillespie.
“We need to look at the big picture rather than just one-off measures.
“Many retailers are feeling very much under threat, as costs are going up, rents going up, cost of goods is increasing and yet consumers are putting more money in the bank because of the uncertain future.
“The best thing the Government can do is restore confidence, but they don’t seem to able to do that so far.”
Gillespie says there is little the Government can do in tomorrow’s Budget to improve business and consumer confidence.
“What they could do is call for a double dissolution,” he says.
“I think that is what is needed. We need strong direction and we can’t get it from a divided Parliament; we have weak leadership and we are suffering as a result.”
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
