The tax cuts coupled with the increased 50 per cent Child Care Tax Rebate will boost incentives for low‑income earners to work, including super mums who juggle the demands of work and raising children.
Providing incentives to work
The Government understands that many parents find it difficult to go back to work because of the cost of child care. These tax cuts combined with the increased Child Care Tax Rebate will help family members who want to gain or return to part‑time work.
The Government's tax cuts will allow Australians to earn up to $14,000 in 2008‑09 (up from $11,000 in 2007‑08) without incurring a net tax liability, providing a real benefit to part‑time workers.
By 2010‑11, a typical second‑income earner will be able to work 14 hours per week without paying any tax.
The Government's tax plan will boost the number of people in the workforce at a time when there are too few workers available.
The chart shows the increase in a family's disposable income where one parent earns $60,000 and the other parent decides to return to work for 1, 2, 3, 4 or 5 days a week earning full‑time equivalent of $45,000. Their two children are in long day care. Where the other parent goes from not working to working three days a week, the family's disposable income increases by $269 a week. This is $48 a week more than it would have been without the Government's Working Families Support Package, comprising $39 a week of increased Child Care Tax Rebate and $9 a week of tax cuts.
Helping single parents to rejoin the workforce
Cynthia is a sole parent working full time and earning $45,000 a year. She has two children: 8‑year‑old Jacob and 6‑year‑old Rebecca.
The Government's tax cuts reduce Cynthia's tax bill by $1,050 in 2008‑09. By 2009‑10, her tax bill is $1,350 less than in 2007‑08, and $1,800 less by 2010‑11. Over those three years, Cynthia's benefits from the tax cuts add up to $4,200.
Cynthia is also entitled to almost $480 more in Child Care Tax Rebate to help with the costs of after school care. She also benefits from up to $750 in Education Tax Refund to help her with the costs of educating Jacob and Rebecca.