Wednesday, March 11, 2009

Could our stimulus billions be getting traction?

THE $11 BILLION avalanche of one-off payments to families, farmers, carers students and tax payers begins today, throwing shopkeepers what they hope will be a lifeline.

The $950 back-to-school bonus, training bonus, carers bonus, farmers hardship payment and $900 single income family bonus will be paid to bank accounts from today and from March 24. The tax bonus, worth up to $900 per taxpayer, will be paid from early April.

$900 Single Income Family Bonus - from today

$950 Back to School Bonus - from today

$950 Carer Payment - from March 24

$950 Farmer’s Hardship Payment - from March 24

$950 Training and Learning Bonus - from March 24

Tax Bonus worth up to $900 - early April

$900 tax bonus for incomes up to $80,000
$600 bonus for higher incomes to $90,000
$250 bonus for higher incomes $100,000

Today's otherwise bleak National Australia Bank business survey records a rebound in business confidence (albeit to the level that applied in the 1991 recession) driven according to the bank by "improved retail and wholesaler confidence" ahead of the handouts.

"The sectors most likely to benefit from the handouts are are the ones with improved expectations," said NAB chief economist Alan Oster.

"But it is noteworthy that these expectations are not being driven by improved conditions. Retail conditions deteriorated February."

The NAB business conditions index slid to a new low not seen since June 1992. The bank says there is little in the survey to suggest it has bottomed. Forward orders and employment expectations have fallen to their lowest level since June 1991.

A separately released Access Economics report says the earlier $8.7 billion stimulus payment granted retailers "a reprieve," but even so "the economic backdrop continues to get uglier and these measures are likely to only result in real retail spending treading water".

"The bonus payments in the Nation Building package will provide a support for retailers, but against an underlying deteriorating trend," said Access director David Rumbens. "Retail recovery might have to wait until 2010-11."

Both Access and NAB are expect unemployment to peak at 7.5 per cent, above the government's forecast of 7 per cent. Official figures out tomorrow (THURS) are expected to show that the rate climbed to 5 per cent in February.

The ANZ's job advertisement count plunged a further 10 per cent in February, to be down 40 per cent over the year. Newspaper job advertisements are down 55 per cent over the year.

"This is the worst outcome on this record," said ANZ economist Warren Hogan.

"It suggests the downturn is likely to last throughout 2009, with little prospect of a meaningful recovery before 2010. It suggests the economy entered recession in late 2008 and remains in recession."

In parliament Prime Minister Kevin Rudd defended the stimulus payments saying "whether it is the International Monetary Fund, the Business Council or the Chamber of Commerce and Industry, every responsible mainstream business organisation stands up with the government to say that in this time of national economic emergency, a global economic recession which is washing across Australia, this is the time for governments to engage in temporary deficit and temporary borrowing in order to provide economic stimulus."

Opposition Leader Malcolm Turnbull said there was no evidence that the December cash splash had created "a single job".

The NAB is now forecasting that the Australian economy will contract 1 per cent this year, about the same as the global economy. It expects the US to contract 2.75 per cent.

The latest from the Tax Office:

"Get your tax bonus faster – update your details now

The Tax Office is reminding people whose address or bank account details have changed since they lodged their 2007-08 tax return to update them by Sunday 15 March to get their tax bonus payment faster.

The Tax Office will send out tax bonus payments from 6 April to the bank account or postal address people used on their 2007-08 income tax return unless these details are updated.

Tax Commissioner Michael D’Ascenzo said around 2.6 million people changed their contact details last year.

“We know there are still some people in the community who need to update their details from those provided in last year’s return,” Mr D’Ascenzo said.

“Anyone who needs to update their details and hasn’t done so already should contact the Tax Office by Sunday 15 March 2009.

“The fastest way to get your payment is directly into your bank account.
“People just need to call us to change their details.”

Bank account details can be updated 24 hours a day, by phoning 1300 686 636.
Address details can be updated by phoning 1300 686 636 between 8.00am and 6.00pm weekdays and 9.00am and 5.00pm on Saturday 14 March and Sunday 15 March.

“People who haven’t lodged their 2007-08 tax return need to do so by 30 June 2009 in order to be eligible for the payment,” Mr D’Ascenzo said.

“Anyone affected by natural disasters, significant illness or injury are eligible for an extension of the 30 June 2009 deadline to 30 June 2010.”

Eligibility and the amount of tax bonus paid are based on the 2007-08 income tax return and is regardless of age or household income.

You are probably eligible if you were an Australian resident and paid tax in 2007-08 and your taxable income was $100,000 or less.

For more information about tax bonus payment, eligibility or lodging your tax return visit


The Tax Office does not send emails asking for personal information including tax file numbers, bank or other financial institution account or credit card details. Under no circumstances should you give personal information including credit card or banking details to people who call you claiming to be from the Tax Office or from unsolicited emails.

If you are concerned phone the Tax Office on 1300 686 636 to verify the legitimacy of the call and to report any suspicious phone calls or emails.

The Tax Office does not charge a fee to provide the tax bonus payment."