The federal government released its 2013-14 budget earlier this week (May 15), and with it comes many changes that may have an effect on how households spend their money on retailing in Australia.
The new budget has taken away the baby bonus, which was a $5,000 payment made to Australians who have children.
“Retailers will feel the effects of the scrapped baby bonus, which will reduce from $5,000 to $2,000 for a first child and from $3,000 to $1,000 for a second child and will be means tested and those with an income over $112,000 will be ineligible to receive the bonus,” said Australian Retailers Association executive director Russell Zimmerman in a May 14 statement.
“The abolition of the baby bonus will hit young families’ hip pockets just when they hit retail stores catering for their new children.”
While the payments were only small, taking them away from Australians may have an effect on how much they are willing to spend.
However, the budget did contain some support for households, with this year being the first full year that the Schoolkids Bonus is available for families with school-aged children. Through this initiative, families can receive up to $410 for each primary school-aged child, and $820 for each secondary school-aged child.
This will help to free up cash for many people around the country at the beginning of the year, which can be a difficult time for families dealing with dilapidated savings accounts from Christmas and start of school term costs.
And with the Reserve Bank of Australia cutting the cash rate earlier this month, households can enjoy paying their mortgages off at a lower rate while also reducing pressure on budgets – if banks and lenders pass on cuts.