In a federal budget that was as much about a pending election as it was an economic update, Treasurer Josh Frydenberg has pledged to deliver a stronger economy and future for Australia.
Acknowledging the past three years had seen Australians tested by natural disasters and a global pandemic ‘for which there is no playbook’, he noted Australia was leading the world in its economic recovery.
The 2022/23 budget is designed to build on this momentum, with spending for regional infrastructure, health, defence, and initiatives to address the rising cost of living.
While announcing a raft of expenditure, the Treasurer also revealed an improved economic position compared to what was predicted mid-pandemic only one year ago.
“By the end of the forward estimates, the budget is $100 billion better off compared to last year,” Mr Fydenberg said.
“The deficit for 2022‑23 is expected to be $78 billion, or 3.4 per cent of GDP. Over the next three years, this will more than halve to 1.6 per cent.”
Real estate initiatives
Mr Frydenberg noted the scheme would be doubled to allow for 50,000 places per year.
“We’re helping more single parents to buy a home with a deposit as low as 2 per cent,” he said.
“We’re helping more first home buyers to buy a home with a deposit as low as 5 per cent.”
There was also a focus on affordable housing, with the announcement $2 billion would be provided to the National Housing Finance and Investment Corporation.
“Helping more Australians to own a home is part of our plan for a stronger future,” Mr Frydenberg reflected.
Cost of living
The rising cost of living dominated discussion in the lead-up to the budget, and Mr Frydenberg had this issue high on his agenda, announcing a ‘temporary, targeted and responsible cost of living package’ to ease pressure on the average household.
- an immediate cut to the fuel excise, saving Australians on average 22c per litre at the bowser.
- a new one‑off $420 cost of living tax offset for more than 10 million low‑and‑middle income earners.
- a new one‑off $250 Cost of Living Payment, delivered within weeks to 6 million Australians, including pensioners, carers, veterans, job seekers, eligible self‑funded retirees and concession card holders.
Noting small and family businesses were ‘at the heart of our economy and local communities’, Mr Frydenberg also unveiled new incentives for small business.
- A $120 tax deduction for every $100 spent on training employees.
- A $120 tax deduction for every $100 dollars small businesses spend on digital technologies, such as cloud computing, e-invoicing, cyber security and web design.
- Up to $15,000 in wage subsidies for employers who take on apprentices.
Regional areas were among the major budget winners of 2022/23, with Mr Frydenberg announcing what he described as an ‘unprecedented regional investment package’.
- A $7.4 billion investment in more dams and water projects to improve vital water security and expand irrigation.
- A $2 billion regional accelerator program to invest in skills, education infrastructure, export market development and supply chain resilience for our regions.
- A $1.3 billion telecommunications package to expand mobile coverage across 8000km of regional transport routes.
- More training places for doctors at regional universities, and better access to health services and childcare.
Meanwhile, a series of further infrastructure commitments were made that focussed on transport, such as the:
- Brisbane to Sunshine Coast faster rail.
- Sydney to Newcastle faster rail.
- The METRONET project in Western Australia.
- The North‑South Corridor in South Australia.
- Great Eastern Drive in Tasmania.
- Central Australian Tourism Roads in the Northern Territory.
- Melbourne Intermodal Terminals to increase the efficiency of the national freight network.
- More than $500 million for local councils to deliver priority projects and $880 million to better connect regional Australia with ports, airports and other transport hubs.
With Covid and the war in the Ukraine both affecting the global supply chain, Mr Frydenberg announced the government’s attention would turn to Australian manufacturing.
This included funding to drive collaboration between universities, the CSIRO and industry to rapidly commercialise new technologies in clean energy, medical supplies, defence and other high priority areas, and a new patent box for the agriculture and low‑emissions technology sectors.
“This will see income from new patents developed in Australia taxed at almost half the rate that applies to large companies,” he noted.
Climate also received a brief mention, with Mr Frydenberg noting Australia was now on track to achieve Net Zero emissions by 2050.
“Technology, not taxes, will get us there,” he said.
“We are investing in clean hydrogen, carbon capture and storage, batteries and large‑scale solar.
“Tonight, we make further investments in microgrids to support regional and remote communities that don’t otherwise have access to the grid with small‑scale renewable energy projects like solar and wind.”
Health received a nod, with the addition of new drugs to the pharmaceutical benefits scheme, further investments in mental health initiatives, and a $1.3 billion package to address violence against women and children.
Paid parental leave
The budget looked to expand eligibility and provide greater flexibility and choice when it came to paid parental leave.
“More families will be able to access 20 weeks of leave and decide how they will share it,” Mr Frydenberg said.
“For the first time, single parents will now be able to access the full 20 weeks.”
The education sector is set to receive more than $180 billion in funding over the next four years, with Mr Frydenberg noting this included ‘record funding for preschools’ and ‘record funding for schools’ as part of a continued investment in these areas.
Finally, with global tensions in the headlines, the government is also seeking to bolster national security.
“…tonight I announce a new 10 year, $9.9 billion investment in Australia’s offensive and defensive cyber capabilities,” Mr Frydenberg said.
Rounding out his budget speech, Mr Frydenberg noted the past three years might have been tough, but this was not the time to change course.
“This is a time to stick to our plan – a plan for a strong economy and a stronger future,” he said.
“We will deliver.”