And that was Parliament 43...

Note: I edited this post on 19 February 2014 to replace Chart 5 with the correct chart (mistakenly, the original was for the yet to be completed Parliament 44).

A little over a year ago I wrote a post about how tax-transfer system changes made by Parliament 43 had affected 9 different household types.  At the time Parliament 43 was still a going concern, making the picture I painted incomplete.   We are now well into Parliament 44 so it’s possible to redo the Parliament 43 post with results for the entire period.  I’ve also been giving some attention to 5 additional household types since the original post, so this one will cover 14 in total.

As with the earlier post, the “analysis” (I hesitate to use such a grand term for this little exercise) essentially compares the disposable income (ie, after the effect of tax and transfer payment adjustments) of a particular household type at the election date for Parliament 43 with the same type of household at the election date for Parliament 44.  This is done for all private incomes up to $200,000.  The tax-transfer changes that led to any differences between the outcomes on the two dates are shown graphically.

Importantly, the private income is the same in real terms at the start and end of the period.  That’s because the focus of the post (and this entire blog really) is changes made by the tax-transfer system alone.  Changes to household income brought about by other factors (eg, wages growth; rises/falls in interest rates) are not included.

Before digging into the details of the changes for each household type I’ve put the headline changes together to make comparisons easier.  However, given there are 14 households I’ve spread this out over 3 line charts to reduce the clutter.  They are roughly grouped as single person households, couple households and households with children.

Single person households

Chart 1 shows the result for 4 households:

·         Single person aged 25 with Newstart allowance where relevant (NSA 25)

·         Single person aged 67 with age pension where relevant (AP 67)

·         Single person aged 25, full-time tertiary student with a HELP debt and Austudy payment where relevant (Aus 25)

·         Single person aged 55 with Newstart allowance where relevant (NSA 55)

In all cases the person does not have private health insurance.  This is so that changes to the arrangements for the medicare levy surcharge can be shown.

Chart 1

The standout item here is the relatively large increase in the disposable income of the student, particularly those with private incomes in the (roughly) $10,000 to $30,000 range.  As we’ll see when we get to the individual household charts, this reflects the introduction of the student startup scholarship and the relaxation of the Austudy payment income test.

The main theme though is that the tax-transfer system delivered real gains in disposable income for zero or low private income households, but actual losses at middle to high incomes.  This is a significant change from the pattern of the preceding 3 Parliaments, all of which did more or less the opposite.  (There are several posts on this blog that compare outcomes for a particular household type across 4 Parliaments should you wish to check this out – this one is as good as any, albeit rather incomplete in relation to Parliament 43.)

Couple households

This broad theme (dare I say “redistributive”) is also evident when looking at the couple households in Chart 2.  The households shown are:

·         Single (private) income couple, both members aged 55, with Newstart allowance where relevant (NSA-NSA 100:0 55)

·         Single (private) income couple, both members aged 25, with Newstart allowance where relevant (NSA-NSA 100:0 25)

·         Single (private) income couple, both full-time tertiary students aged 25 with HELP debts and Austudy payment where relevant (AusP-AusP 100:0 25)

·         Single (private) income couple, both aged 25, one partner on Newstart allowance and one (the non-worker) on disability support pension (NSA-DSP 100:0 25)

·         Two income couple, 50/50 income split, both members age 25, with Newstart allowance where relevant (NSA-NSA 50:50 25)

As before, the households do not have private health insurance.

Chart 2



 

As with Chart 1, the biggest change is for low income students.  Also, while the broad direction of the change is the same as for singles (gains at low incomes, reductions as incomes rise), the reductions are more substantial.  This reflects a deliberate targeting of single income couples without dependent children over the period.  The mechanism for this will become apparent later when looking at the makeup of the tax-transfer changes affecting individual households.

Households with dependent children

For the with-children grouping the households examined are:

·         Single parent aged 35, 2 children aged 8 & 10, Newstart allowance where relevant (NSA 35 (8, 10))

·         Single parent age 30, 2 children aged 6 & 8, parenting payment where relevant (PP 30 (6, 8))

·          Single parent aged 35, 2 children aged 8 & 10, grandfathered parenting payment in 2010; Newstart in 2013 where relevant (PPS=>NSA 35 (8,10))

·         Two income couple, 50/50 income split, both aged 40, 2 children age 14 & 16, Newstart allowance where relevant (NSA-NSA 50:50 40 (14, 16))

·         Single (private) income couple, both aged 30, 2 children aged 2 & 4, Newstart allowance and parenting payment where relevant (NSA-PP 100:0 30 (2, 4))

 

 

These are shown in Chart 3.

Chart 3

The overall pattern here is similar to the first two groups – real increases at low incomes; real reductions at higher incomes – although there is quite a wide variation in the extent of the gains.  Again, the causes of these disparities will be canvassed in the individual household discussion.

Now to the individual households, starting with the singles group and the simplest case, a single person.

Single person group

Chart 4 – Percentage change in disposable income over Parliament 43: single person aged 25 with Newstart allowance where relevant

 

This might be considered to be the base case, given that the Australian income tax system is largely focussed on individuals.  The pattern is consistent with the general theme outlined above, with gains at low incomes and losses from a little under $40,000.  A possible surprise is the real gain in Newstart allowance (NSA) over the period.  It’s the first since July 2000 and like that earlier increase is a response to changes elsewhere in the system.  Back then it was the introduction of the GST; in Parliament 43 it was to offset the effects of the introduction of carbon pricing.

This was achieved via the creation of a new rate component which has been included in pretty much all payments – the clean energy supplement.  The intention was to make the supplement more than the expected price impact of the carbon changes to provide a real gain.  Measured against changes in the CPI, this appears to have succeeded.  (If you are interested, an explanation of the way in which the clean energy supplement was created is here.)

The biggest factor in the gain for zero private income singles is, however, the income support bonus.  I have included this because my calculation system involves “full-year” entitlements, but it’s worth noting that not everyone gets the bonus.  It’s actually a lucky-dip entitlement, paid twice a year but only to those on payment (in this case, NSA) on the “test day”.  If you aren’t on payment on the test day, no bonus.  If you are, even if you’ve only been on payment for a day, then the bonus is yours.

The bonus was something of a sop, offered in the face of continuing criticism of the level of Newstart rates.  It represents a significant increase in the assistance package in percentage terms, but is cheaper than an actual rate increase of the same amount because the lucky dip system means large numbers don’t ever get it.

The other noticeable gain comes from tax cuts, and pops up from around $10,000 private income.  This too was introduced at the same time as carbon pricing and was intended to assist low income households.  It was achieved by a combination of increasing the tax-free threshold from $6,000 to $18,200, rejigging the low income tax offset and some associated changes to the marginal tax rates.  The net effect was quarantine tax cuts to lower income households, something of a first given the way in which tax cuts in earlier Parliaments had been applied (this post compares the last 4 Parliaments and makes this point more obvious).

At incomes from about $40,000 there were no real changes affecting income tax and so we see the incursion of so-called bracket creep.  As I’m not incorporating wage increases, in this case what we are seeing is just the decline in real value of the various tax thresholds which have the effect of increasing the tax tax.  There is, however, a significant change to the medicare outcome due to the introduction of higher medicare levy surcharges for those without private health insurance.  The effect of crossing the thresholds for higher surcharges shows up as a sudden increases in the medicare levy impost.

Given that my focus has been to show the tax transfer changes during the period, I have assumed no private health cover.  However, for those who did have private cover there were related changes to the level of private health insurance rebate – it was reduced as incomes crossed the various surcharge thresholds.  So, whether privately insured or not, real reductions in disposable income occurred due to changes to medicare/private health insurance arrangements.

 

Having said that, there’s still that odd medicare-related gain showing up in the private income range of roughly $84,000 to $88,000.  This is because the threshold for the imposition of the first level surcharge was increased over the period by reference to wages growth.  Overall wages grew faster than inflation, pushing the threshold up by an above-CPI amount.

 

All these changes affected disposable income as shown in the chart.  If you do check out the earlier 4 Parliament comparison post you will see that the outcome in Parliament 43 was really very different to the preceding 3.  It was quite a substantial change in direction and one that I don’t think has been fully acknowledged.   Think of it this way – if you imagine that wages growth and tax-transfer changes were rowers in a boat, for Parliaments 40 to 42 both of them were rowing together.  In Parliament 43, at least for those with incomes above $40,000, it’s as if the tax-transfer rower decided to face the other way, with the two now pulling in different directions.

Yes, the wages growth rower was pulling harder, but the effect on the boat of having this sudden turnaround is noticeable nonetheless.

But enough with the watery analogies, now to the older singles.

Chart 5 – Percentage change in disposable income over Parliament 43:  single person aged 67, age pension where relevant

(I’m not going to discuss the changes at incomes from around $75,000 and up.  The outcomes are the same as those for younger singles and have already been outlined in the discussion for that household type.)

 

At the zero private income point, single age pensioners had around a 7% real gain in disposable income.  Unlike single NSA discussed earlier, this was achieved entirely through increases in age pension itself (including the new clean energy supplement) – pensioners (with one exception) didn’t get the income support bonus.  However, bonus or not, the net gain was still more than double that of single NSA and reflects the fact that pension rates are linked to wages growth, not just changes in the CPI.

An interesting result is the rather different tax outcome compared to that for single NSA.  For many years age pensioners have had a more generous tax treatment than the ordinary taxpayer, a legacy of Howard era changes.  This takes the form of what is in effect a higher tax-free threshold, an arrangement that did not significantly change over Parliament 43.  However, an unchanged threshold when combined with higher (taxable) pension payments and “bracket creep” has caused the effect shown in the chart.  The effect of this is that single aged with incomes from around $30,000 upward had no gain, or a real reduction in incomes flowing out of the tax-transfer changes during Parliament 43.

The only other item of note is the continued erosion of the seniors supplement (the grey item in the chart).  This is partly due to the non-indexation of its income test threshold, and also due to the increasing overlap between the age pension and the supplement (you can’t get both, as the supplement is in effect already built into the age pension rate).

Next up, single students.

Chart 6 – Percentage change in disposable income over Parliament 43:  single student aged 25 with a HELP debt, Austudy payment where relevant

 

As outlined in my initial comments around Chart 1, this household – single tertiary students with Austudy – had the biggest real gains from tax-transfer changes over Parliament 43.  There were two main drivers for this.  First, the introduction of the student startup scholarship which is provided to most tertiary students who are receiving Austudy payment, and second, a substantial relaxation of the Austudy income test (accounting for the large gains starting at around $8,000).

One area of difference between these results and those for other payments is the presence of a clean energy advance.  However, this is really a timing thing.  All payments initially had carbon pricing compensation provided via an advance, which was then integrated into the income support payment proper via the clean energy supplement.  The timing of that changeover depended on when the effects of carbon pricing would show up in the indexation process for the particular income support payment.  Austudy’s indexation is very lagged – the price effects of the carbon changes introduced in July 2012 didn’t get picked up until the January 2014 indexation round and from that date the change from the clean energy advance to a clean energy supplement took place.  That’s outside the timeframe covered by Parliament 43 and hence Austudy’s results still incorporate the clean energy advance.

At higher incomes the results for tax and medicare are the same as for the other singles, with the exception of the presence of HELP related spikes.  Again, this is a timing issue.  The thresholds for the various HELP repayment rates are indexed based on changes in the CPI in the previous year.  This almost inevitably means the indexation adjustment being made is not the same as the CPI change in the actual year of implementation, resulting in spikes (up or down depending on the direction of the CPI change from one year to the next).

Lucky last in the singles households I’m looking at is persons aged 55 on NSA.

Chart 7 – Percentage change in disposable income over Parliament 43:  single person aged 55 with Newstart allowance where relevant

This household type is included to illustrate the effect of changes to the mature aged worker tax offset (MAWTO).  The income support and bonus arrangements are identical to those shown in Chart 4 (singles aged 25).  The standout is the markedly different tax outcome.

Entitlement to the MAWTO was quarantined to those born before 1 July 1957 – previously it was available to everyone aged 55+. The effect is that 55 year olds at the start of Parliament 43 got a better tax deal than 55 year olds at the end.

Removing tax offsets, like MAWTO, was one of the ways in which Parliament 43 sought to improve government revenue. Another offset given a similar treatment was the dependent spouse tax offset. This is discussed in the next group I’m covering – couples.

Couples group

Chart 8 - Percentage change in disposable income over Parliament 43:  single income couple, both aged 55, Newstart allowance where relevant

 

The standout item in this household type is the reduction in disposable income caused by the increased tax-take.  This comes from three sources.  First is the loss of the MAWTO, as per the discussion in respect of Chart 6.  The second is the loss of the dependent spouse tax offset (DSTO).  The presence of a partner is no longer recognised for income tax purposes in households without children where the partner was born on or after 1 July 1952.

The loss of these two tax offsets, along with third element – bracket creep – resulted in a significant reduction in disposable income for 2013 households compared to the equivalent 2010 version, and affected households with incomes above around $25,000 a year.

Part of the reason these reductions cut in at such low private income levels (this is less than the minimum wage) is the combined effect of the poor design of the income support bonus as applied to couples (see here for details) and the erroneous way in which the clean energy supplement was handled (see here for details).  These produce the notch reduction in the NSA result at around $25,000.

At incomes below this point the real gains in the Newstart outcomes flow from the changes already discussed – the clean energy supplement and income support bonuses.

The next household is simply a younger version of the above, which allows us to see the outcomes without the effect of the loss of MAWTO.

Chart 9 - Percentage change in disposable income over Parliament 43:  single income couple, both aged 25, Newstart allowance where relevant

As you might expect, this is very similar to the preceding household, the only real difference being the losses on the tax side max out at around 7% as opposed to around 8% for the older couple.

One minor item in charts 7 and 8 is the low income supplement for partner 2 (P2) – the small splash of green at a little over $40,000 private income.  This was a relatively obscure part of the overall carbon pricing household compensation package and is only available where compensation is not provided elsewhere in the tax-transfer system.  It appears at incomes above the income support cutout point (below which the clean energy supplement is in play) but only runs for a few thousand dollars more private income before entitlement ceases to exist.

Next up, it’s back to students.

Chart 10 - Percentage change in disposable income over Parliament 43:  single income couple, both tertiary students aged 25 with HELP debts, Austudy payment where relevant

As with the single student shown earlier, Parliament 43 provided quite significant gains to this couple type at low incomes through a combination of scholarships, income support bonuses and a relaxed income test.  However, this largesse comes crashing down once partner 1 (P1) has sufficient income to exit Austudy payment.  Flaws in the design of the sequential income test used for these payments, plus issues with the design of the scholarship, the clean energy supplement and the income support bonus all conspire to remove the gains in a sudden death fashion.

When the effect of the removal of the DSTO is added in we see an amazing turnaround from an almost 20% real gain for those at around $25,000 to an almost 7% loss at around $40,000.  In fact, so substantial are these reductions that students in this situation may find their financial position improves by working less, something I examined in more detail in this post.

One criticism of the couple households I’ve chosen to look at (so far) is that they are all single income, and that losses due to the removal of the DSTO are actually a good thing.  Indeed, the removal of that offset was a deliberate decision, aimed squarely at getting rid of a supposedly out-of-date notion of dependency and providing a bit of an incentive for second earners to enter the workforce.  No doubt the fact that there are savings to be had from such a change helped ease the way.

Nonetheless, within the rhetoric around the change there was recognition that for some couples there may still a case for providing a tax-offset based on dependency.  There are two main scenarios where this is still seen as appropriate:

·         Where one partner is reasonably unable to work due to caring commitments;

·         Where one partner is reasonably unable to work due to invalidity

Given this policy position I’ll look at one more single income couple type before moving on to a two-income couple.  The household type I’ve chosen to reflect this policy setting is a single income couple where one is an “invalid” (to use the tax legislation term), eligible for disability support pension (DSP).

Chart 11 - Percentage change in disposable income over Parliament 43:  single income couple, both aged 25, one an invalid.  Newstart allowance and disability support pension where relevant

 

This household really shows off the “gains at low incomes; reductions at higher incomes” trend of Parliament 43, with a marked change in outcome at around $70,000.

At the zero income point most of the gain for the household comes from increases in the DSP, which dwarfs the gain for the NSA partner, even with the NSA income support bonus (there was no bonus for DSP).  This is a result of the different rate setting (indexation, etc) arrangements for pensions compared to benefits like NSA.  The former is benchmarked to wages as well as being adjusted for changes in the CPI and pensioner/beneficiary living cost index (PBLCI), whereas NSA is CPI adjusted only.

At around $70,000 entitlement to pension cuts out under the income test, leading to the substantial reduction in disposable income.  The marked change in the tax result reflects the DSTO rules discussed earlier.   The working partner is able to claim the offset provided the “invalid” partner is receiving DSP.  Once DSP entitlement is lost so too is access to the spouse tax offset, causing an increase in tax payable by the household.

This is one of the perils of “piggybacking” entitlement to one scheme onto another – in this case relying on receipt of DSP as the marker of invalidity.  The rule in this case also undoes one of the eligibility criteria for the spouse tax offset – it’s supposed to be available to households where the “breadwinner” income is below $150,000.  Linking the offset to DSP receipt has the effect of causing entitlement to be lost at less than half this amount.

But again, it’s a cheap way of running the thing.

The final couple household I’ll look at is, at last, a two income one.

Chart 12 - Percentage change in disposable income over Parliament 43:  two income couple (50:50 split), both aged 25.  Newstart allowance where relevant.

 

As a two-income couple, the dependent spouse tax offset does not feature and as you can’t lose what you don’t have there’s nothing like the tax losses experienced by the single income couple of the same age.  In fact, although the tax-transfer changes still follow the pattern of turning negative at higher incomes, this doesn’t occur until around the $75,000 mark – a sharp contrast to the $27,000 or so point for single income couples (see Chart 8).

Similarly, the gains on the income support side are greater from around $22,500 than for the single income couple – more than double in fact.

And with that comes the end of the couples.  Now to the households with dependent children.

Dependent children group

Chart 13 - Percentage change in disposable income over Parliament 43: sole parent age 35, two children aged 8 & 10, Newstart allowance where relevant

 

Single/sole parents were very much in the news during Parliament 43, largely due to the late-term decision to remove the special “grandfathering” arrangements that had applied since July 2006.  This affected people who had been continuously in receipt of parenting payment as a single person since before that date.  The grandfathering ceased with effect from 1 January 2013.

To cover this group and the “standard” arrangements that have been in place for non-grandfathered people since July 2006 I’ll be looking at three different sole parent households.  The first of these, shown in Chart 12 above, compares a single person with 2 children under the standard rules at the start of the period, with a similarly constituted household at the end.  In this case the income support payment is Newstart allowance, as the youngest child is aged 8 or more.

The standout item is the gain in NSA, peaking at about 12%.  This triangular shape is a result of the change to the NSA income test taper rate for single “principal carer” parents from the generally applicable 50% & 60% to 40%.  This took effect from 1 January 2013, coinciding with the removal of the grandfathering provisions.  The idea was presumably to ease the transition because up to that point the losses experienced by sole parents moving from parenting payment to NSA were enormous for those already working (see this post for details).

Relaxing the income test took some of the sting out of the transition for the ex-grandfathered group, but also significantly improved the disposable income of the sole parent NSA population already subject to the “new” July 2006 rules.

In addition to the gain from NSA, the school bonus also appeared during Parliament 43, further adding to the improved financial outcomes for this household type.

As with the earlier households, at higher incomes bracket creep style effects cause an increase in the tax take relative to 2010, but a similar thing can be seen with family tax benefit Part A and Part B.  Both of these were subject to indexation freezes on some of their income test parameters, resulting in a fall in value in real terms.

For single parents whose youngest child is under 8 years, the usual entitlement is parenting payment (PPS), and that household is next.

Chart 14 - Percentage change in disposable income over Parliament 43: sole parent age 30, two children aged 6 & 8, parenting payment where relevant

The not-inconsiderable increase at zero private income for this group was driven by the introduction of the schoolkids bonus, the income support bonus (single parenting payment recipients were the only pensioners to receive it) and the use of wages growth benchmarking to set the base rate of parenting payment itself.

At higher incomes (ie, from around $65,000) some additional assistance was provided via the single income family supplement, another carbon pricing compensation measure, this time targeted at single income families with children.  However neither it nor the schoolkids bonus was enough to offset the negative effect of the taxation “bracket creep” combined with the impact of freezes to some FTB A income test parameters.

The net effect is that the overall picture follows the now familiar pattern of gains at the low income end and losses at higher incomes.  However, in this case the losses do not appear until around the $100,000 mark, the cause of which is largely the schoolkids bonus.  That bonus is slated for removal by the current Government and given its importance in the results for with-child households so far, this will have a strongly negative impact on outcomes during Parliament 44.

Now to the “grandfathered” group, that attracted so much attention during the latter period of Parliament 43.

Chart 15 - Percentage change in disposable income over Parliament 43: sole parent aged 35, 2 children aged 8 & 10, grandfathered parenting payment in 2010; Newstart in 2013 where relevant

Before turning to the chart itself, just a reminder about how they work in general.  I’m comparing the disposable income (ie, after tax and transfer payment effects) of a particular household type in 2010 with the same type of household in 2013.  It’s not comparing the same household – it would not be possible to say, for example, that children were the same ages at the start and end of the period if I did.

That means the results shown in this chart are not a depiction of what happened to a particular household when the grandfathering rules changed.  Instead, I’m showing the difference in the treatment of this particular household type at the election dates.  One clear example of this is the way the schookids bonus shows up.  In the chart it’s a gain – there was no schoolkids bonus in 2010; there was in 2013.  But on January 1 2013 when the grandfathering rules changed it already existed and individual households would not have gained (or lost) that payment.

If the specific impact at 1 January 2013 interests you, I have canvassed the impact of the change with that focus in other posts (see here and here as examples).  This post is about the cumulative changes over the life of a Parliament, not just a single point in time change.

In the chart we can see that the income support package (parenting payment in 2010 versus Newstart allowance plus the income support bonus in 2013) has substantially reduced over the period.  This comes from a lower rate (as shown at the zero private income point) plus, as income rises, the effects of a tighter income test (a lower income threshold before private income reduces payment).

The change from parenting payment (which for singles is a pension) to Newstart also means the loss of access to the pensioner tax offset (the 2010 version in this example), which results in a higher tax liability even though taxable income is less than before.   That (and a bit of bracket creep) is the cause of the triangular red tax part of the chart, under the income support reduction.

The income support and tax related losses have been partly offset by the introduction of the schookids bonus, which for some households outside of the income support system actually led to a real gain over the period (ie in the broad income range $50,000 to $100,000.  At higher incomes the pattern reverts to the overall loss position evident in the other household charts, in this case with the addition of the income-test indexation freeze induced decline in the value of FTB A and FTB B.

That covers the three single parent household types I’ve done calculations for (there are of course many types, but these are the main groups) so it’s now time to look at some couples with dependent children households.

Chart 16 - Percentage change in disposable income over Parliament 43: two income couple (50:50 split), both aged 40, with 2 children (14 & 16).  Newstart allowance where relevant for the adults.

 I picked this household not so much for the 50:50 income split (the discussion around Chart 11 covers that aspect) but for the changes to youth allowance and FTB A.

The treatment of full-time secondary student children aged 16+ underwent quite a change during Parliament 43.  At the election date such children could attract either youth allowance or a low (aka base) rate of FTB A.  At low incomes getting youth allowance was pretty much a no-brainer, but as parental incomes increased there came a point where it was better to be in the FTB A payment system than remain in youth allowance. 

Deciding which payment stream the child should be in was fraught with difficulty, particularly where there was more than one child in the family, one of whom was under 16.  The change reflected in the chart above was to extend the 13-15 year old child rate of FTB A to full-time secondary students.  This meant that when the child turned 16 at high school or college there was no longer a need to try and work out the most advantageous payment route.  Additionally, the FTB A rate was also higher than the youth allowance rate, making it a positive outcome overall for most households.

The chart illustrates a loss of youth allowance (the negative lilac shade) which is more than offset by increased FTB A.  This improved outcome extended (in this household type) to incomes a little over $90,000 a year – a widespread gain.  The household also benefited from the previously discussed schoolkids bonus.

The schoolkids bonus does provide quite a substantial gain for household types that pick it up but, as the name suggests, it’s not available to families with children under school age.  So the final household type will look at the change over Parliament 43 for a family with young children.

Chart 17 - Percentage change in disposable income over Parliament 43: single (private) income couple, both aged 30, 2 children aged 2 & 4, Newstart allowance and parenting payment where relevant

This chart illustrates (through its absence) what a difference the schoolkids bonus made.  For this household type gains were limited to those flowing from the clean energy supplement’s incorporation into the income support and family tax benefit payments, plus the tax cuts mentioned way back under Chart 4.  From an income of a little under $40,000, the tax-transfer system delivered real losses.

Interestingly, for all the other with-child households considered, real losses did not arise until private income reached around $100,000.  Again, this is attributable to the schoolkids bonus.  The current Government has plans to abolish this payment, along with the income support bonus, during Parliament 44.  Given the significant impact these two payments had in the results shown in all the households considered here (with the exception of the age pensioner in Chart 5), their abolition will produce markedly negative outcomes.  In light of that, I’m inclined to repeat this exercise for Parliament 44 as we progress through the term.  Stay tuned.