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FAMILIES and earners in the top tax brackets were the main winners in last month's Federal Budget, which put money in the pockets of virtually every Australian.
Significant tax cuts for middle and high-income earners - delivered by changing tax thresholds - were coupled with family tax benefit increases.
These increases would be delivered as $600 cash rebates next financial year, with a bonus of another $600 to be paid before the end of this tax year, on June 30.
This could provide up to two million families with cash payments of $1200 in the months before voters go to the polls, probably in October.
The Budget will deliver an extra $40 to $50 a week to the average Australian family, with slightly more for the higher paid.
Federal Treasurer, Peter Costello, delivering his ninth budget said the Budget was aimed squarely at the family "struggling with juggling between work and family".
Mothers will be paid $3,000 for the birth of children this year, rising to $4,000 in July 2006 and $5,000 in July 2008. This payment will also apply to people adopting children under six months of age.
While the payment was not specifically designed to encourage people to have children to counter an ageing population, breeding was good for the country.
"If you can have children it's a good thing to do... one for your husband, one for your wife, one for your country," Mr Costello, a father of three, told a pre-Budget briefing. "You go home and do your patriotic duty for your country."
He dismissed suggestions his Budget was aimed solely at winning the election, saying it was primarily a document of reform.
The Government also targeted aged care and small business with a capital injection for nursing homes and allowing about 740,000 firms, with a turnover of under $50,000 a year to pay their 10 per cent goods and services tax (GST) annually instead of every quarter, from next month.
More than $750 million will be spent on national security initiatives, including a big boost in funding for frontline intelligence agencies such as' ASIO, while billions of dollars will be spent on new infrastructure funding. Warning that the ageing population would eventually place unsustainable pressure on governments, the Treasurer announced a new package of superannuation measures.
The Government has bolstered the co-contribution scheme, lifting the means-test threshold from $40,000 to $58,000. It also will increase its contribution to $1.50 for every dollar saved by individuals.
But an ambitious plan to cut the superannuation surcharge for high-income earners back to 7.5 per cent will face stiff resistance in the Senate (the Upper House).
Mr Costello said that Australia should enjoy a strong economy for some years to come with next year's growth rate at 3.5 per cent, through to 2007-2008, with inflation estimated at 2.5 per cent. But a burst of strong spending may lead to higher interest rates, economists warn.
But there has to be a poison pill somewhere. A further $216 will go the Australian Taxation Office (ATO) for a blitz on capital gains tax; deductions for rental investment properties; small to medium sized businesses and self-managed super funds.
* For fuller Budget details log on to the Government's official web site: www.budget.gov.au