Thursday, March 19, 2009

The truth about cats and dogs... and the bonus

CRIMINALS serving time in jail will receive next month's $900 tax bonus because it's too hard to stop them, according Prime Minister Kevin Rudd.

Accusing the Opposition of feigning outrage over the prospect of bonus payments going to prisoners and to cats and dogs who were named as beneficiaries of tax-paying estates, he said he was doing exactly what the Coalition did when it was in government.

"I am advised that the series of personal income tax bonuses paid by the Howard government in 2004-05, 2005-06 and 2006-07 flowed through to the vast majority of incarcerated individuals who paid tax."

The only exception was the Senior Australians Tax Offset.

The Tax Office had told him it was unable to exclude taxpayers who happened to be prisoners because it didn't know who was a prisoner and who was not...

The revelation that the tax bonus will go to tax-paying prisoners follows confirmation last week that the Centrelink-administered bonus payments are going to former Australian residents who have moved to other countries, something the government said it was required to do by reciprocal pension treaties.

"They are making up it as they go along and they are even trying to make a new rule for the Monopoly game," said Opposition leader Malcolm Turnbull. "Instead of going directly to jail, do not collect $200, Kevin Rudd says go directly to jail, collect $900. It's not so much as stimulus as a crimulus."

Coalition Treasury spokesman Joe Hockey said each year hundreds of people left their estates to pets. Executors were required to lodge tax returns for the estates, some of which would now get the bonus.

"Cats and dogs are richer for it," he told ABC Television.

"It’s actually not funny because the people who are missing out are low-income people. There will be Australians who have lodged a tax return in the 2007-08 financial year who will not be paying any net tax because their income was so low and they will not be receiving any payment from the Government and yet people in jail, people overseas are going to be receiving this payment and it was all done in the name of stimulating the Australian economy. It’s pretty damn hard to spend money if you’re locked up in jail for 30 years."

The first lot of Centrelink-administered bonus payments went into bank accounts last week. The second lot will go into accounts next week. The tax bonuses go out from April 6.

Who gets the tax bonus?

. Australian residents who have filed a 2007-08 tax return

. Prisoners and beneficiaries of estates included

Who misses out?

. Taxpayers earning more than $100,000

. Low income Australians who pay no tax

Who gets the CentreLink payments?

Eligible people on Centrelink's books whether living in Australia or overseas.