Millions to be $250 richer as cost of living support hits bank accounts

Pensioners, welfare recipients, veterans, and concession card holders are set to benefit from $1.5 billion in cost-of-living payments hitting bank accounts from Wednesday.

Six million eligible pensioners, welfare recipients, veterans, and concession card holders will be $250 richer this week as $1.5 billion in cost-of-living payments hit bank accounts from Wednesday.

The payments are part of the package of announcements made by Treasurer Josh Frydenberg to help Australians cover rising costs which also include $420 tax offsets for low and middle income earners and the 50 per cent fuel excise cut.

The money will likely come as welcome relief to Australians with rising inflation numbers expected to be announced Wednesday, potentially foreshadowing an interest rate hike when the Reserve Bank meets next week.

Prices have been going up around the world for a variety of reasons including a rise in oil prices most recently exacerbated by Vladimir Putin’s invasion of Ukraine.

Treasury figures were quick to caution that Wednesday’s inflation numbers would remain lower than in other advanced economies and even as such would not take into account the government’s efforts to cut prices including slashing fuel excise.

The cut to the fuel excise tax will not be felt in this week’s inflation numbers.

In a recent note, Commonwealth Bank’s Stephen Wu said that headline inflation could come in around 4.3 per cent but that a “policy-relevant trimmed mean CPI” would come in at around 3.4 per cent, still above the Reserve Bank’s target, suggesting that interest rates could be hiked as soon as next week.

“The Coalition’s economic plan is helping families with cost of living pressures when they need it most,” said Mr Frydenberg.

Federal Treasurer Josh Frydenberg revealed details of the cost of living payments in the 2022 Budget. Picture: NCA NewsWire / Luis Enrique Ascui

“Global factors such as high oil prices due to Russia’s invasion of Ukraine and supply chain disruptions due to Covid are putting pressure on household budgets here at home.

“That is why in the Budget we committed to a temporary, targeted and responsible cost of living package.”

“Under our cost of living package, more than 10 million Australians will also benefit from a new one off $420 cost of living tax offset.”

“In contrast, Labor has no plans to help families with cost of living pressures. At the last election they proposed $387 billion in higher taxes on individuals, retirees, family businesses, housing and superannuation,” Mr Frydenberg said.