The federal government has flagged a vital cost-of-living relief measure, as the colder weather kicks in and we fire up heating of all kinds.
It is estimated that up to 5.5 million households and one million small businesses will receive up to $500 to offset their power bills under a $1.5 billion package in tomorrow’s Federal Budget.
The relief will be aimed at pensioners, people on Centrelink payments and small businesses, according to Treasurer Jim Chalmers, in a move designed to “take some of the edge off” cost-of-living pressures.
States to contribute
Dr Chalmers said the subsidy for winter bills will be a central plank in the Budget.
How much you receive may depend on where you live, because the states are kicking in half and separate agreements had to be negotiated with each state.
“So, it’ll be different around the country. We’ve struck eight different deals with different jurisdictions … but we hope and we expect that it will take some of the sting out of these price rises, which are putting pressure on families, households and small businesses,” Dr Chalmers said on Sky News.
The government has also hinted that it might include more age groups in its promise to increase the Jobseeker payment.
It flagged last week that payments would increase for the 55-plus age group only, a decision that was met with public outcry.
Dr Chalmers told The Guardian that the government was considering “broad support for the most vulnerable in the Budget, and it won’t all be limited by age”.
Gas taxes
Dr Chalmers also confirmed a $2.4 billion increase in the Petroleum Resource Rent Tax (PPRT), which taxes profits from the sale of petroleum commodities at a rate of 40 per cent. It is paid by oil and gas companies on their offshore liquified natural gas products.
The PPRT has, however, not raised the revenue expected. The legislation allows companies to claim tax credits for the cost of exploring and developing gas fields, which can be carried forward and deducted against future liabilities.
Dr Chalmers has said that rather than allowing companies to fully deduct their project costs against income, deductions will be capped at 90 per cent. The changes will come into effect on 1 July.
“Australians will get a fairer return on their resources sooner, and what this change means is about $2.4 billion in the forward estimates that the gas companies wouldn’t be paying, the offshore LNG projects wouldn’t be paying, were it not for this change,” the Treasurer told the ABC.
Wipe out credits
“This means more tax sooner from these projects. And it means that it can help fund our cost-of-living package and other priorities in the Budget.”
The PPRT generates about $2 billion a year.
The Greens commissioned an independent costing, which found that with a significant overhaul the tax could net $94.5 billion for the Budget over a decade.
The Greens want to wipe out all the gas industry’s tax credits, with Greens leader Adam Bandt saying “it’s time to make big gas corporations pay their fair share of tax”.
“Greedy gas corporations are taking Australia for a ride, making billions of dollars in profits and sending it offshore tax free,” he said.
Do you think you will qualify for the winter bill payment? Do you need it? Why not share your opinion in the comments section below?
Also read: How to avoid winter bill shock