Budget 2023: Everything we know ahead of Jim Chalmers’ second budget


A “modest budget” that will offer targeted cost-of-living relief but not make a bad situation worse – that’s what Treasurer Jim Chalmers is gearing up to hand down on Tuesday.

A year on from taking office, and with inflation still running too high, the Albanese government has to walk a fiscal tightrope – don’t add to inflation but help those doing it tough.

As the aged care budget blows out to $24.8bn this year, Defence seeks to repurpose parts of its budget, and the government attempts to rein in an out-of-control NDIS, there are hints there could be a surplus for the first time in 15 years before years of structural deficit.

Here’s what we know about the 2023 budget so far:

Cost of living

Australians have been promised that Tuesday’s budget will include a “substantial” cost-of-living package designed to help struggling Australians while also not adding to inflationary pressures.

A $1.5 billion electricity package will provide up to $500 in power bill relief to more than five million households and one million businesses.

Promised in the wake of an emergency parliamentary sitting in December, the package has been plagued by disagreements and other complexities that prevented it being rolled out any earlier.

Expect the budget to boast that the government’s decision to intervene in the gas market will also ease gas price rises to just 18 per cent and 4 per cent over the coming two years (instead of 20 per cent in each).

There will also be an electrification package for low-income households and renters designed to boost energy efficiency and insulate households from future price shock in the energy market.

Welfare

Australians over the age of 55 on JobSeeker are expected to receive an additional boost to their fortnightly payments.

While a government-ordered review called for all JobSeeker recipients to receive a boost, Dr Chalmers this week said people over 55 – where women are overrepresented – was the most vulnerable group of recipients.

However there are signs people younger than 55 might also receive an increase to their payments, just not as much.

Single parents receiving welfare payments could get a helping hand for an extra few years. Currently, single parents receive the single parent payment until their youngest child turns eight. After that their payments drop about $100 a week.

There are suggestions that age could rise to 13 or 14 in line with recommendations from the Women’s Economic Equality taskforce, but the government has remained tight-lipped.

The much maligned ParentsNext program that forced parents with young children to undertake parenting programs or job training or risk losing their payments will be axed.

The government has made strong suggestions that there may be an increase to Commonwealth Rental Assistance in the budget – as has been widely called for.

It’s unclear yet how much the government would raise the payments by or whether there would be requirements for such an increase.

The NDIS has become one of the biggest strains on the federal budget. As such, the growth rate will be cut from 13.8 per cent to 8 per cent by mid-2026. The government has put aside $720m to fund staff increases and necessary reforms to drive down costs.

Childcare

The government has been promising to make childcare cheaper since before it took office, and 1.2 million families are set to benefit from July 1 when subsidy rates are lifted.

The government will commit $55.31bn across the next four years to make childcare more affordable.

In addition, the government will commit $72.4m over five years to support the skills and training of workers in the early childhood education and care sector.

Defence

A wide-reaching Defence Strategic Review has recommended – and the government accepted – $19bn over the forward estimates to modernise Australia’s Defence posture and force.

Defence Minister Richard Marles last week said there would be a “reprioritisation” of $7.8bn already in the Defence budget.

As for personnel, the DSR recommended more than 18,000 additional troops would be needed by 2040 to keep up.

In a bid to retain existing personnel, the government has already announced a $50,000 bonus to those who stay on for an extra three years after their service requirement is up.

The total program will cost more than $400m.

Workers

Millions of Australians will be better off as part of a budget plan to force employers to pay superannuation on payday, instead of holding out for quarterly or other payments.

Some experts predict it will make young workers $50,000 better off at retirement.

It’s not all good news for workers, though, with more than 10 million Australians earning less than $126,000 to no longer receive the low and middle-income tax offset.

Instead, the government is gearing up to roll out so-called “stage 3” tax cuts from next year that will change tax brackets and save high income earners thousands.

Health

Just as Australia had finally almost won the war against cigarettes, flavoured e-cigarettes – or vapes – reared their ugly heads, targeting young people.

The government says it will make vapes harder to obtain, announcing Australians will soon require a prescription from their doctor before they can buy a flavourless vape as a stop smoking treatment only.

Health Minister Mark Butler announced the budget would include $234mn to fund the new measures.

In a bid to curb smoking more broadly, the government has announced taxes on cigarettes will be raised by 5 per cent, totalling a $3.3bn increase in revenue over the next three years to help pay for health programs.

At the pharmacy, up to six million Australians will be allowed to buy double their medication for the price of a single script as part of a shake-up to the Pharmaceutical Benefits Scheme.

Long Covid research will also benefit from the budget, with the government announcing a $50m investment into the Medical Research Future Fund.

And, the Medicare rebate will be extended for heart health assessments until June 30, 2025, in order to target the country’s “biggest killer”: heart disease.

The budget is expected to contain more details about the government’s Medicare overhaul.

Aged care

An increasing ageing population is set to continue to put immense pressure on the budget, as aged care becomes the fifth-largest area of federal government expenditure.

The costs will rise to an estimated $29.6bn this coming financial year, up from $24.8bn in 2022, a leap of 23 per cent.

Rising costs have been attributed to Australia’s ageing population, with the number of aged care recipients growing 3.5 per cent from 2020-21 to 2021-22 to reach 1.5 million.

Aged care workers will start receiving their 15 per cent pay rise – as promised by the Albanese government and determined by the Fair Work Commissions – from July 1.

It will cost the budget $11.3bn over the next four years to fund the increase for the 250,000 workers in the sector.

Costs will be recuperated by raising costs for services within the sector.

Homebuyers

Family and friends wanting to buy a house together will be able to under an overhaul to the first-home guarantee and its regional counterpart.

The expansion of the scheme will allow thousands more Australians to access the government’s guarantee – which means they can purchase a home with as little as a 5 per cent deposit, with the government to assure the remaining 15 per cent.

Oil and gas

Big oil and gas producers will have their tax deductions capped and will face tougher tax compliance measures as part of a budget crackdown estimated by Treasury to raise $2.4 billion over four years.

The biggest revenue raiser out of the 16 technical petroleum resources rental tax (PRRT) changes will be limiting annual deductions for expenditure at 90 per cent of the project’s income each year from July 2023.

Schools

More than 1300 schools across the country will benefit from a share of $32m in grants to upgrade school infrastructure and equipment.

The funding, part of a $250m commitment to improving school infrastructure, will go towards projects like new or improved outdoor learning areas, new or upgraded airconditioning, better ventilation, and new tablets and laptops.

Natural disasters

State-of-the art technology will be invested in to help save the lives of Australians living in areas impacted by natural disasters.

The national messaging system will be operational by 2024, but the government won’t reveal how much the program will cost.

The government will spend $10.1m to establish a taskforce to set up a new broadband system that will help all emergency services agencies across jurisdictions communicate more effectively.

Elsewhere, in the wake of recent floods, an additional $4.4m will go to 83 emergency and flood relief providers across Queensland and Western Australia.

Environment

To improve the quality of water flowing to the Great Barrier Reef, the government has committed $150m.

There’s also an extra $262.3m for national parks, including Uluru.

Culture

Australia’s nine “national collecting institutions” – including Old Parliament House, the National Archives and the Portrait Gallery – will receive $535.3m over four years for urgent repairs and improvements.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *