Key Points
- The federal budget will be unveiled next week and comes as Australia battle high inflation, and a weak global economy.
- So, what do we already know is in it?
The Albanese government will soon hand down its first federal budget.
The economic blueprint will be unveiled on Tuesday 25 October and comes as Australia battles high inflation, and against the backdrop of a weak global economy.
Treasurer Jim Chalmers has said previously that it will be a "fairly standard bread-and-butter budget" aimed at funding election pledges, with a focus on spending that delivers economic benefits and doesn't add to inflation.
So, what do we already know is in it?
Expansion of paid parental leave
Prime Minister Anthony Albanese recently announced .
An extra fortnight will be added to the scheme each year starting on 1 July, 2024, until the full 26 weeks is available from July 2026.
Eligibility will also be expanded so that families earning up to $350,000 can claim from 1 July 2023, if they don't meet the individual income test of $156,647.
Other changes will include an easier claiming process that allows either parent to be the primary claimant and allowing parents to take weeks of leave at the same time.
Dads and partners who meet residency requirements would also be supported to receive parental leave even if the birth mother does not meet the newly arrived resident’s waiting period requirement.
The paid parental leave scheme will be extended up to 26 weeks and eligibility criteria is also being expanded. Source: AAP
Contentious tax cuts
In the lead-up to the unveiling of the Albanese government's first budget, the spotlight has been on whether
So far, the tax cuts have survived, although they are not due to take effect until 2024. They would see the 37 per cent marginal tax rate abolished, and the 32.5 per cent rate lowered to 30 per cent. This means the 30 per cent rate would apply to everyone earning between $45,000 and $200,000, while those earning more will pay 45 per cent.
How the Stage 3 tax cuts impact people on different incomes Source: SBS News
Better disaster response
An extra $588 million will be provided this financial year for Services Australia to support Australians during emergencies. This includes the hiring of 2,600 extra staff until 31 January to help people to secure payments and support during natural disasters and to access pandemic leave payments.
Specialised staff will also be deployed to enhance the delivery of services at evacuation and recovery centres. Funding will also be provided to improve digital customer services.
Funding will be provided to help people in disaster areas. Source: Getty / Dan Peled
Boost to childcare and toy libraries
Changes to the Child Care Subsidy will leave 1.26 million families better off, with 95 per cent of parents to get an increase in subsidies from 1 July 2023.
A family with the median combined income of $120,000 with one child in early childhood education will save $1780 in the first year of the plan. The Higher Child Care Subsidy for families with multiple children aged five or under in early childhood education will be retained.
Indigenous children will also be able to access 36 hours of subsidised childcare a fortnight from July 2023.
The government will also invest $12.4 million to promote playgroups and toy libraries.
Extra TAFE and university places
An extra 20,000 extra university places will be provided for courses in areas of critical skills needs across 42 higher education providers, starting next year and in 2024.
The places will be allocated to students under-represented at universities, including those from poorer backgrounds, Indigenous Australians and students from rural and remote Australia.
There will be extra spots in education, nursing, IT, sciences and engineering.
About 180,000 fee-free TAFE and vocational education places will also be available, with extra support for women and other disadvantaged groups.
Extra training places will be delivered in areas including care (aged care, early education, health care and disability care), technology and increasing digital skills, hospitality and tourism, construction, agriculture, manufacturing and defence.
180,000 fee-free TAFE and vocational education places will be made available. Source: AAP
Road and rail
The budget will also include $9.6 billion for the construction of road and rail projects across the nation, with Victoria the biggest beneficiary. The state will get $2.57 billion, which includes $2.2 billion for the Suburban Rail Link.
NSW will get $1 billion for Western Sydney roads, part of the high speed rail network and other projects. Queensland gets $1.47 billion, including money for the Cairns Marine Precinct expansion and Bruce Highway upgrades.
Northern Territory is another big winner, getting $2.5 billion for marine infrastructure, regional logistic hubs and roads funding. About $670 million will go to Western Australia, including money for an electric bus network, while South Australia will get $660 million for freight highway upgrades and other projects. Tasmania will get $685 million with most of the money to go towards highway upgrades.
The plan also means the end of cash for so-called "zombie projects" that had been sitting flagged but never realised in budgets under the previous coalition government, including road projects such as the East West Link in Victoria and the Perth Freight Link.
Great Barrier Reef funding
An extra $204 million will be provided for projects to improve water quality around the Great Barrier Reef, to help corals evolve more quickly, reduce the accidental capture of threatened species, and to set up the new Coastal Marine Ecosystems Research Centre at the Central Queensland University in Gladstone.
More funding will be provided to help protect the Great Barrier Reef Source: AAP / J Sumerling
Deficits for years
The government late last month unveiled the final budget outcome for 2021/22, which noted a deficit of $32 billion — about $50 billion better than expected.
The result was courtesy of stronger commodity prices and more income tax due to low unemployment.
But despite this, the federal budget is likely to remain in deficit for at least four years because the favourable conditions are unlikely to last.
"Australia faces more substantial pressures that will have an ongoing impact on our fiscal position including higher costs of servicing government debt, increased spending on government payments from higher indexation, and underlying spending growth in areas such as NDIS, health, aged care and defence," Mr Chalmers said in September.
Cost of living relief?
Mr Chalmers has downplayed expectations of the cost of living relief in next week's federal budget, warning some measures could push up .
He noted the cost of living could increase even further due to devastating floods in NSW, Victoria and Tasmania and .
Preliminary talks have been held with Treasury about the economic impact of the floods.
"There will be a substantial impact on the cost of living, there will be a substantial impact on the budget and there's no pretending otherwise," Mr Chalmers told the Nine Network on 18 October.
Mr Chalmers said he did not want any cost of living measures in the budget to be counterproductive.
He said an important balance needed to be struck.
"What we don't want to do, and we've seen this overseas, is provide cost of living relief in a way that just creates more inflation and pushes interest rates up higher than they would otherwise be."
What other measures will be in the budget?
- , which Labor campaigned on, will cost $2.5 billion. Labor's plan includes wage increases, more carers, and requires all aged care homes to have a nurse on-site 24/7.
- . This will cost $54.3 million in 2022/23.
- . The plan will cost close to $770 million over four years.
Watch SBS World News on Tuesday 25 October for the latest federal budget updates starting from 7.30pm. A federal budget special edition will air at 10pm.
With AAP.
