Key Points
- Treasurer Jim Chalmers delivered the first Labor budget in nine years.
- Who are the winners and losers, and what does it all mean for you?
It comes against a backdrop of the soaring cost of living, global challenges, extreme weather events, and almost a trillion dollars of debt.
Mr Chalmers said the budget would provide responsible relief, target investment in a more resilient economy, and begin budget repair.
"Restraint is the name of the game in this budget," he said on Tuesday.
So who are the major winners and losers, and how will the budget impact you?
Winners
Working parents
Prior to the election, the government promoted the budget as being positive for families, so it comes as no surprise childcare and paid parental leave are receiving significant investment.
From July 2023, childcare subsidy rates will lift from 85 per cent to 90 per cent for families earning less than $80,000. Subsidy rates will then taper until it reaches $530,000.
Families will continue to receive existing higher subsidy rates for their second and subsequent children aged five and under in care, up to 95 per cent.
Additionally, the government is investing $531.6 million over four years to , which will see the amount increase up to a total of 26 weeks from July 2026.
An additional two weeks will be added each year from July 2024 to July 2026, increasing the overall length by six weeks.
Women
The Albanese government has repeatedly promised to advance gender equality, and has reiterated this in its budget papers.
In addition to and childcare subsidies – both of which the government says will improve women’s economic equality and the gender pay gap – women’s safety initiatives will be supported by $1.7 billion in funding.
Legislation to provide and investment in social and affordable housing is designed to assist women and children experiencing domestic violence.
Students and the education sector
Together with the states and territories, the government is making a $1 billion investment in fee-free TAFE and vocational education places through the one-year National Skills Agreement.
In 2023, 180,000 fee-free TAFE and community-based vocational education places will be available, marking the first stage in the government’s plan for a total of 480,000.
At least 15,000 of these will be dedicated to courses in aged care to help relieve pressure in the sector.
This budget also invests more than $770 million for “better schools, happy and healthier students, and more qualified teachers”, along with $485 million to create up to 20,000 new university places over the next two years for students from underrepresented backgrounds.
Environment
Climate change and the environment feature prominently in this year’s budget papers.
There is $1.8 billion for environmental and heritage protection, including an extra $204 million to accelerate the defence and restoration of the Great Barrier Reef.
Initiatives to save native species, improve urban waterways, establish research centres, improve ocean and marine park management, and engagement with First Nations Peoples on climate change are also being supported.
Childcare, environmental protection, women's safety, closing the gap initiatives and fee-free TAFE will all receive a funding injection. Source: SBS News
More than $800 million will be invested in providing solar battery storage for up to 100,000 homes, cutting taxes on electric cars, building a national electric vehicle charging network and hydrogen refuelling stations on highways.
Indigenous Australians and Voice to Parliament
The budget for First Nations people and communities.
This includes $50.2 million for the Australian Electoral Commission to prepare for the referendum to enshrine a Voice to Parliament in the Constitution
There is also $54.3 million allocated to training 500 First Nations health workers and practitioners, and $164.3 million for health infrastructure projects to cater for First Nations populations.
The budget also sees a record $99 million invested in First Nations Justice.
Defence
Funding for defence will increase by 8 per cent in 2022–23 and rise to more than 2 per cent of GDP over the next four years.
The government will also invest $13 million into appointing a special envoy to Southeast Asia and establishing an Office of Southeast Asia to coordinate government efforts across the region.
Another $31 million will be provided to extend the Australian Public Service cyber hubs pilot to help improve cyber resilience and security.
Pensioners
Pensioners who want to work will be allowed to earn up to $11,800 (instead of $7,800) before their pension is reduced.
Older Australians will also be encouraged to downsize their homes, with the government changing pension asset testing so that proceeds of home sales will be exempted for up to 24 months instead of 12 months.
Access to downsizer superannuation contributions for people aged 55 to 59 will be expanded.
Treasurer Jim Chalmers has handed down the 2022-2023 Federal Budget. Source: AAP / Lukas Coch
Aged care
The government has provided funding of $2.5 billion to ensure there are 24/7 registered nurses onsite in aged care from 1 July 2023. Average care minutes will increase to 215 per resident, per day, from 1 October 2024.
The government has also committed $810.2 million for aged care providers to manage COVID-19 outbreaks and is providing $34.9 million to continue in-reach testing for residential aged care facilities until 31 December 2022.
People wanting to come to Australia
Businesses crying out for workers will find it easier to get workers thanks to from 79,600 to 142,400.
A new Pacific Engagement Visa will also be introduced with up to 3,000 places available from next year for nationals of Pacific Island countries and Timor-Leste, and this will be in addition to 195,000 available as part of the permanent program.
Those wanting to reunite with family from overseas will also benefit.
Partner and child visas will be driven by demand with no limit placed on these. More parent visas will also be available, with the government increasing the number available from 4,500 in 2021/22, to 8,500 this year.
Housing affordability: A winner in the medium term, a loser for now?
This budget introduces the new Housing Accord, struck between governments, investors and industry, which will aspire to build one million new, well-located homes over five years from 2024.
The government is also committing an initial $350 million for an extra 10,000 new affordable homes, on top of the government’s existing commitments. State and territory governments will also build on this with up to 10,000 new homes; providing up to 20,000 new affordable homes in total.
Additionally, the Help to Buy Scheme will allow up to 40,000 eligible Australians to own their own home with a lower deposit and smaller mortgage, while the Regional First Home Buyer Guarantee is set to support another 10,000 new homeowners each year.
The benefits of these measures will not be felt immediately, so those seeking to purchase a new home in the near future or currently struggling to find an affordable rental will continue to face pressures.
Losers
Households
Despite several measures designed to ease soaring cost-of-living pressures – such as cheaper childcare, increasing paid parental leave and decreasing price of medicines – the average Australian household will feel little day-to-day relief in the immediate future.
Current costs of expenses such as housing, food, and fuel remain high, and inflation is expected to peak at 7.75 per cent later this year.
The high inflation rate, along with global challenges and high interest rates, means real wages are not expected to start growing again until 2024.
"Wages are growing faster now than they were before the election, but that welcome news is tempered by rising electricity prices and grocery bills eating into pay packets," Mr Chalmers said.
Carparks and other Coalition projects
To support their investments and spending, the Albanese government will deliver $22 billion in spending cuts and redirections.
These include numerous Coalition projects, including $1.7 billion from redirecting funds from the Regional Accelerator Program and $1.4 billion from partially reversing the Energy Security and Regional Development Plan.
Finance Minister Katy Gallagher's office said there will also be $671 million cut from the Urban Congestion Fund, for “car park rorts" and $252 million from the Building Better Regions “slush fund”.
Large multinational companies
There will be a crackdown on multinationals, which will be forced to publicly release certain tax information from 1 July 2023.
They will also be prevented from claiming certain tax deductions with links to low or no-tax jurisdictions.
Penalties for breaches of competition and consumer law will be increased from $10 million to $50 million per breach, and from 10 per cent of annual turnover to 30 per cent of annual turnover (whichever is greater) during the period the breach took place.
Tax dodgers
Tax practitioners who provide poor and unlawful tax advice will be targeted thanks to funding of $30 million for the Tax Practitioners Board to be put towards investigations and to improve tax compliance.
The Australian Taxation Office (ATO) will also get $80 million to continue its program into tackling the overclaiming of deductions.
