Treasurer Jim Chalmers has delivered Labor’s first Budget in almost a decade, labelling it “a responsible budget that is right for the times and readies us for the future”.
Acknowledging the recent hardships brought on by the global pandemic and multiple natural disasters, not least of which are the floods of the past fortnight and earlier this year, Mr Chalmers said the Budget was an investment in a “stronger, more resilient, more modern economy”.
“It provides cost of living relief, which is responsible, not reckless, to make life easier for Australians without adding to inflation,” he said.
“And it begins the hard yards of Budget repair. It recognises that our best defence against uncertainty around the world is responsible economic management here at home.”
Mr Chalmers said the nation was facing the prospect of a third global downturn in just 15 years and this time it was a “war” driving high prices and higher interest rates.
“This time demands a different response,” he said.
”One that puts a premium on what’s responsible, affordable and sustainable.
“That’s why this budget pays for what’s important, strengthens our buffers against adversity and begins to build a better future.”
Despite positivity from the Treasurer, the 2022/23 deficit was estimated at $36.9 billion, with no sign of a return to surplus over the next five years.
However, it is less than half of what was predicted in the March budget, and a third of what was forecast less than a year ago.
Mr Chalmers said the Budget delivered a five-point plan to tackle cost of living relief, including cheaper childcare, expanding paid parental leave, cheaper medicines, more affordable housing and getting wages moving again.
“This is a $7.5 billion package that helps put some money back in people’s pockets, boosts productivity and grows the economy,” he said.
“But it’s carefully targeted and carefully timed, so it avoids placing additional pressure on inflation.”
Real estate initiatives
The Federal Government announced a new national Housing Accord, which has set an aspirational target of building one million, new, well-located homes over five years from mid-2024.
Under the Accord, Mr Chalmers said the Federal Government, state governments, the construction industry and private investors would join forces to deliver on the plan.
But Mr Chalmers admitted “most of the supply needs to come from the market, not the government”.
The Federal Government will provide $350 million over five years to deliver 10,000 affordable dwellings.
This is in addition to the 30,000 new social and affordable housing dwellings delivered through the Housing Australia Future Fund.
“This will be delivered through an ongoing funding stream to help cover the gap between market rents and subsidised rents, making more projects commercially viable,” Mr Chalmers said.
“State and territory governments will build on our commitment with up to 10,000 new homes as well. That’s up to 20,000 new affordable homes in total.”
Under the Accord, state and territory governments will undertake expedited zoning, planning and land release to deliver on a joint commitment to improve the availability of social and affordable housing in well-located areas, including looking for immediate opportunities to free up well-located state land.
Housing Australia Future Fund
The Australian Government is establishing the $10 billion Housing Australia Future Fund, to be managed by the Future Fund Management Agency.
The Fund will help build 20,000 new social housing dwellings, 4000 of which will be allocated to women and children impacted by family and domestic violence and older women at risk of homelessness.
It will also help build 10,000 new, affordable dwellings, including for frontline workers.
Regional First Home Buyer Guarantee
The Federal Government will help 10,000 eligible regional first home buyers a year to buy a home by guaranteeing up to 15 per cent of the purchase price, with a deposit as low as 5 per cent.
Defence Home Ownership Assistance Scheme
The Government is committing $46.2 million to expand the Defence Home Ownership Assistance Scheme. This will support veterans and Australian Defence Force members to purchase a home through monthly subsidies on mortgage interest payments.
Help to Buy
Labor will spend $326.4M over four years under the Help to Buy shared equity scheme. Eligible home buyers will have access to an equity contribution to buy a home with a smaller deposit and a smaller mortgage.
Helping older Australians who want to downsize
The Government will extend the exemption of home sale proceeds from pension asset testing by 12 months, as well as expanding access to make downsizer contributions to superannuation for people aged 55 to 59.
- $4.7 billion over four years to deliver cheaper child care for 1.26 million families.
- $531.6 million over four years to expand Paid Parental Leave to 26 weeks by 2026.
- $787.1 million over four years to reduce the general patient co-payment for treatments on the Pharmaceutical Benefits Scheme from $42.50 to $30 per script.
- Supporting wage increases for our lowest paid workers and getting wages moving again.
A stronger, more resilient economy
- Delivering 480,000 fee-free TAFE places and a $50 million TAFE Technology Fund to modernise TAFEs.
- Providing 20,000 additional university places for disadvantaged Australians.
- $474.5 million over two years to support student wellbeing and improve classrooms.
- Supporting women’s workforce participation and advancing gender equality.
- Boosting the Work Bonus income bank to give older Australians the option to work and keep more of their pension.
- A Powering Australia Plan to drive investment in cleaner, cheaper energy, including $20 billion of low-cost finance under Rewiring the Nation to upgrade our electricity infrastructure.
- Acting on climate change and a $1.8 billion investment in strong action to protect, restore and manage our precious natural environment.
- Up to $200 million per year on disaster prevention and resilience initiatives through the Disaster Ready Fund, as well as additional funding for flood affected communities and extra staff to quickly get Australians the support they need.
- Establishing the $15 billion National Reconstruction Fund to support a future made in Australia.
- More than $120 billion of investment in transport infrastructure over the next 10 years.
- $2.4 billion in NBN Co to extend fibre access to 1.5 million more premises and $1.2 billion for the Better Connectivity for Regional and Rural Australia Plan.
- Protecting our farmers from pests and diseases such as foot-and-mouth disease.
- $28.5 billion in Budget improvements, including spending reductions, re-prioritisations and strengthening the fairness and integrity of the tax system.
- Returning 99 per cent of upgrades to tax receipts to the Budget and offsetting nearly all policy decisions across this year and next.
- $235 million to commence the rollout of Urgent Care Clinics and $750 million set aside for the Strengthening Medicare Fund.
- New investment of $3 billion to deliver better aged care.
- Preparing for the referendum to enshrine a First Nations Voice to Parliament in the Constitution.
- Begins the task of restoring the NDIS and securing its future.
- $1.7 billion over six years to support women’s safety.
- Deepening relationships with our Pacific family and across our region.
- Equipping Defence to respond to global and regional security challenges, with funding for Defence rising to more than two per cent of GDP over the forward estimates.
- Ensuring the integrity and security of Australia’s borders.
- Establishing a National Anti-Corruption Commission to restore trust and integrity in government.