A range of new tax relief measures come into play from Wednesday, which will further help business and jobs in the face of the global recession, Treasurer Wayne Swan says.

Income tax cuts, refunds for education expenses and increased child care benefits form part of a new wave of stimulus for the economy, and come on top of the one-off welfare and tax bonuses dished out this year.

“These payments have overwhelmingly benefited low and middle-income Australians and have been very effective in supporting business activity, limiting job losses and keeping Australia from falling into technical recession,” Mr Swan said in a statement.

Upmarket retailer David Jones applauded the government’s stimulus packages and a more stable stock market for an expected 20 to 30 per cent jump in its profits for the second half of 2009, compared with a previous estimate of zero to five per cent growth.

“The stimulus package has been important for confidence, but equally important to us has been the stabilisation of the stock market,” David Jones chief Mark McInnes told journalists on Tuesday.

But such stimulus packages will see a huge run-up in government debt, which opposition treasury spokesman Joe Hockey noted passed the “sad milestone” of $100 billion last Wednesday.

“To my mind, the reference to the global financial crisis has become a smokescreen, hiding the government’s addiction to debt and expenditure,” Mr Hockey told a conference in Sydney.

New data released on Tuesday showed demand for home loans remained the major source of credit raising in an uncertain economic environment, bolstered by low mortgage rates and the government’s more generous first home owners grant.

The Reserve Bank of Australia’s monthly report on outstanding loans showed total credit fell 0.1 per cent in May to an annual rate of just 3.9 per cent - a 15-year low.

Personal credit - other than home loans - dropped for a 12th consecutive month, down 0.6 per cent in May and 7.8 per cent lower than a year earlier.

Commonwealth Securities economist Savanth Sebastian said this was the weakest annual reading since records began 32 years ago.

Demand for business loans continued to tank against a backdrop of weak trading conditions and cuts to investment plans.

Business credit fell 0.7 per cent in May - growing near a seven-year low of just 2.1 per cent over the year and a far cry from the 18 per cent annual pace recorded in May 2008.

Still, owner-occupier housing credit rose 0.7 per cent to be 8.5 per cent higher than 12 months ago.

Mr Swan said in his weekly economic note on Sunday that by the end of May, more than 97,000 first-time home buyers had taken up the government’s grant since it was increased last October as part of the first stimulus package.

He said May saw the biggest take-up so far, with 19,607 first-home buyers using the grant to enter the housing market.

However, other data showed the number of new home sales declined for the first time in four months in May, falling 5.7 per cent.

The Housing Industry Association data showed detached home fells by 6.8 per cent, but the number of unit sales rose by 6.1 per cent.

“Despite the weaker result over May, generational low interest rates, the additional first home owners boost, cuts to stamp duty, and strong population growth will continue to support housing activity,” CommSec’s Mr Sebastian said.

From the start of the new financial year on Wednesday, the 30 per cent marginal tax rate threshold will rise to $35,001 from $34,001, the 40 per cent marginal tax rate will be cut to 38 per cent and the low income tax offset will rise to $1,350 from $1,200.

Among other initiatives, families can claim up to $750 for eduction expenses, while child care support and the baby bonus will increase.

AAP