Jim Chalmers has brought Australia’s Budget back into a $4billion surplus for the first time in 15 years – as the treasurer gives as many as five million Australians cost of living support but hikes taxes up to $1,500 on 10 million low-and-middle-income workers.
Dr Chalmers’ 2023 Budget – handed down on Tuesday evening – is directed at supporting traditional Labor constituencies with aged care workers, single mothers and some Centrelink recipients winning wage increases and boosted benefits.
The government has also announced a $14billion cost of living package that will give some households as much as $500 off their energy bills and has also indicated it won’t change the government’s scheduled Stage Three tax cuts at this time.
But many Australians will be worse off from the Budget, with Dr Chalmers letting the long-running low and middle income tax offset worth up to $1,500 for 10 million Australians lapse. The policy was due to expire regardless of who was in government.
Smokers and vapers will be among those most disappointed, with looming price hikes, due to a hike in tax, and bans.
Dr Chalmers said: ‘It’s a budget in Labor’s best traditions but also Australia’s best traditions, help for the vulnerable, broadening and extending more opportunities, and investing in the future of our country and its people,’ he said.
‘This is a forecast for a surplus this year. There are always good reasons to be cautious about it. We will know for sure in a couple of months’ time.
‘But what we already know is that the much, much stronger budget position that I will release tonight won’t be possible if we copied the approach of our predecessors.’
Treasurer Jim Chalmers will try to deliver a Budget aimed at tackling the cost of living crisis without fuelling inflation
The winners and losers of Labor’s federal Budget are shaping up, against a backdrop of immense cost of living pressure and economic turmoil
While the full Budget is still minutes from being formally announced, many of the government’s main policies have already been released and include key measures aimed to tackle the cost of living pressures without rising inflation.
Last Tuesday, the RBA shocked most financial analysts by lifting the cash rate to 3.85 per cent, adding hundreds of dollars to the cost of the average mortgage.
Australia’s stubbornly high inflation rate means despite the pain, Australians expecting a massive ‘cash splash’ in the Budget will be sorely disappointed, Deloitte economist Stephen Smith said.
Mr Smith forecast some measures to offset the cost of living, but noted too many handouts would risk worsening inflation and seeing more rate rises, which would cripple the economy.
‘Do too little, and low-income households, and the economy more generally, will be left teetering,’ he said.
‘While higher spending appears unavoidable, importantly, that can’t be via a blank cheque.’
Daily Mail Australia details all that we know about the 2023 Federal Budget already.
The government has also announced a $14billion cost of living package that will give some households as much as $500 off their energy bills and has also indicated it won’t change the government’s scheduled Stage Three tax cuts at this time
Cost of living
If your power bill is too expensive
The budget will contain a measure that will help over five million households and one millions small businesses pay soaring power bills.
For more than five and a half million households the amount they can claim is expected to be up to $500, depending on how high prices are and whether a household is on a pension or other fixed income.
It will also depend on what state or territory a household or business is in because it will vary by ‘how much the states and territories are prepared to kick in, because this is a co-investment with them,’ Dr Chalmers said.
But, thousands of families will miss out on the handout. The government has confirmed the money will only be available to those who are eligible for the family tax benefit.
This means households with one child earning over $108,892 will not be eligible, nor would families with two children and a combined income of $117,000.
If you’re a healthcare worker…
The one group who are set to score a significant, $10,000-a-year pay rise are 250,000 care workers – mainly those in aged care.
The frontline workers will be given the record salary bump to battle the cost of living crisis. It is also expected to improve equal pay statistics for women.
The ‘historic’ 15 per cent pay rise will cost the federal budget more than $11 billion, the government said.
Dr Chalmers believes the wage bump will be enough to attract new staff to the industry and keep existing workers.
The frontline workers in aged care (pictured) will be given the record salary bump to battle the cost of living crisis, and is also expected to improve equal pay statistics for women
If you’re on JobSeeker…
The government is expected to increase the Jobseeker payment by up to $2.85 a day, or $40 per fortnight.
After reports of an increase for those over the age of 55, Dr Chalmers on Sunday confirmed any rise would apply to all Jobseeker recipients.
At present payments for a single adult with no dependent children are $693.10 per fortnight, or $49.50 a day, and slightly less for those in a live-in relationship.
Those with a dependent child or who are over 60 receive $745.20 a fortnight, or $53.22 a day.
If you run a small business…
Up to 3.7 million small and medium-sized businesses will be eligible for $20,000 of green energy tax relief, which must be used for equipment to slash their energy bills.
That includes installing new appliances, such as air conditioners, which are powered by solar energy.
This incentive is estimated to cost $314 million over the four year period.
If you’re a carer under 25…
Young people under 25 who are caring for a loved one will be entitled to $3,768 in support – $768 higher than in the past.
This will be a near $10 million funding increase on the budget bottom line.
If you have children in childcare…
Childcare funding will increase by $1.4 billion this budget, taking total government spending for the next four years to $55.31 billion.
The Budget will also include $72.4 million over five years to boost skills and education within the sector.
Childcare funding will increase by $1.4 billion this budget, taking total government spending for the next four years to $55.31 billion
If you’re a single parent…
Single parents will now be entitled to financial support on the Parenting Payment (Single) until their child is 14 in a commitment worth $1.9 billion.
The decision has been widely tipped in the past few weeks and described as an opportunity for Mr Albanese to make up for a Gillard government move, which pushed single parents off the payment when their child turned eight.
The PM has admitted that ‘the sole parent payment is an area where we made a mistake’ in previous governments.
Mr Albanese said: ‘Many single parents – overwhelmingly women – face difficulty balancing caring responsibilities and work.
‘Those difficulties do not end when their child turns eight.’
The updated plan will come into effect from September 20 of this year.
Under the new policy, single parents who are currently on JobSeeker will receive an additional $176.90 per fortnight.
In total, some 57,000 single parents (90 per cent of whom are women) will benefit. The payment is $922.10 per fortnight.
‘By age 14, children have typically settled into high school and need less parental supervision, and single parents are in a much stronger position to take on paid work,’ Mr Albanese said.
Historically, the single parents payment was for singles with children aged up to 16.
But former prime minister John Howard, supported later by Julia Gillard, slashed the age to eight in an attempt to encourage parents back into the workforce.
Two advisory bodies urged the government to extend the payment and the eligibility criteria.
It is understood mutual obligation requirements will still remain in place to continue to encourage parents to return to the workforce.
Help for families with single parents entitled to extra cash. Siblings and friends will also be able to buy a home together under an expansion of the current First Home Buyer Guarantee
Health care
If you need prescription medicine…
Some medicines will be made available at two for the price of one in a move which could benefit up to six million Australians.
A total of 325 medicines are expected to be included in the list, treating a range of conditions from heart disease and Crohn’s to cholesterol.
The changes could save the government $1.2 billion each year.
If you’ve got long Covid…
$50 million will be injected into the Medical Research Future Fund to explore the long term effects of Covid-19.
If you’re on the NDIS…
The NDIS will be a core consideration of this Budget, after it was identified as one of the largest sources of pressure to the government’s bottom line.
An ‘annual growth target’ of eight per cent has been announced in an attempt to save more than $50 billion on the scheme in the next decade. Advocates describe the move as a ‘cut’ to the scheme in real terms. The current growth rate is at about 14 per cent.
The Albanese Government will spend $48.3 million in the 2023-2024 Budget to crack down on fraud and non-compliance within the scheme.
If you use Medicare…
The Budget will dedicate $2.2 billion to taking pressure off the hospital network and beginning a Medicare reform process.
This will also include money specifically used to fixing primary healthcare services.
The Budget will dedicate $2.2 billion to taking pressure off the hospital network and beginning a Medicare reform process
If you’re a vaper…
Recreational vaping will be banned as the government seeks to prevent Australia having a new generation of nicotine addicts.
To tackle the growing black market, the government will increase the product standards for vapes, including by restricting flavours and colours.
Regulation will see pharmaceutical-like packaging, a reduction in the allowed nicotine concentrations and volumes, and a ban on single-use vapes.
Children under four having been reported to Victoria’s poisons hotline as having used a vape.
‘This is a product targeted at our kids, sold alongside lollies and chocolate bars,’ Health Minister Mark Butler said. ‘Vaping has become the number one behavioural issue in high schools, and it’s becoming widespread in primary schools. This must end.’
The Minister said the hard-won gains in public health relating to the reduction in smoking could be undone by a ‘new threat’.
‘Vaping was sold to governments and communities around the world as a therapeutic product to help long-term smokers quit,’ he said.
‘It was not sold as a recreational product, especially not one for our kids. But that is what it has become – the biggest loophole in Australian history.’
At least $234 million will be dedicated to tackling the issue, including $63 million for an information campaign.
The use of vapes among young people has become a major concern for health authorities
If you smoke cigarettes…
The Albanese government has announced three tobacco price hikes will be in next week’s Federal Budget – raising $3.3billion in revenue.
Health Minister Mark Butler announced the excise on tobacco will be increased by five per cent per year over the next three years, beginning on September 1.
Mr Butler said the changes will raise an additional $3.3billion over the coming four years, including $290million in GST payments to the states and territories.
He said it would help ‘to support our health system and the health of current and former smokers and vapers’.
If you’re due for a heart health check up…
The Albanese government will extend the Medicare rebate for heart health assessments until June 30, 2025 this Budget.
The check is considered the nation’s best tool for preventing heart disease.
Mr Butler said: ‘Heart disease is Australia’s biggest killer – one Australian has a heart attack or stroke every 4 minutes. About 2.5 million Australians have a high chance of suffering a heart attack or stroke in the next 5 years, and many don’t know it.
‘The former Government would have had these crucial heart health assessments expire on 30 June 2023 but with about 250,000 people expected receive a heart health assessment over the next 2 years, our government’s action on this has the potential to save thousands of lives.’
The Albanese government will extend the Medicare rebate for heart health assessments until June 30, 2025 this Budget
Tax and Super
If you’re a tradie…
Tradies will likely soon lose the right to instantly write off their utes as small businesses pay more tax under an anticipated Budget change.
Treasurer Jim Chalmers has given no hint the former Coalition government’s instant asset write-off measures will be extended in the Budget.
Under those measures – formally known as ‘temporary full expensing’ – tradies can claim the whole cost of a work ute or van on tax in one year, rather than over eight.
The cost of a vehicle is now capped at $64,741 – which covers Australia’s two bestsellers, the Toyota HiLux and Ford Ranger.
The tax arrangements also allowed businesses with a turnover of up to $5billion a year to claim the cost of office equipment like furniture and computers upfront in one year – with an unlimited threshold. That also applied to tools and machinery.
Under current plans from July 1, small business owners with a turnover of less than $10million will be able to immediately write off the cost of assets costing less than $1,000.
Above that level, items have to be claimed over the life they are used in the business, which can range from three years for a computer to several decades for major production machinery.
Tradies will likely soon lose the right to instantly write off their utes as small businesses pay more tax under an anticipated Budget change
If you pay superannuation…
- Change to tax breaks for balances of $3 million
Australians with super balances of more than $3 million will no longer get generous tax breaks under a new plan announced by Prime Minister Anthony Albanese.
Taxpayers can voluntarily deposit up to $27,500 per year into their super and pay a low concessional tax rate of just 15 per cent if they earn up to $250,000 a year.
But Mr Albanese wants to double that tax rate to 30 per cent for Australians with more than $3million in their super, from July 1, 2025.
That affects some 80,000 people – the top 0.5 per cent of super savers – and would save the federal budget about $2 billion a year.
The other 99.5 per cent of Australians would continue to receive the ‘same generous tax breaks’ of 15 per cent.
The change won’t kick in until after the next election, due by mid-2025.
- Super to be paid on payday
The government is set to announce a plan to force employers to pay superannuation in real time on payday, rather than only making a single contribution each year.
Experts believe it could give young workers an additional $50,000 by the time they retire.
‘This is a big win for the three million mostly young and lower paid Australians unfairly deprived the super they’ve earned and will give them a better shot at building a good nest egg for retirement,’ Industry Super Australia Chief Executive Bernie Dean said.
Taxpayers can voluntarily deposit up to $27,500 a year into their super and pay a low concessional tax rate of just 15 per cent if they earn up to $250,000 a year
If you’re a high income earner…
There are not expected to be any changes to the hotly debated Stage Three tax cuts, as per Labor’s election promise.
Labor has toyed with dumping the cuts, which were legislated under the former Morrison Government with Opposition support in 2019 to come into force from July 1, 2024.
But Industry and Science Minister Ed Husic earlier this month said that dumping the policy in the Budget would be a breach of faith with voters.
When the cuts kick in, the number of tax brackets will slashed from five to four, for the first time since 1984.
Those earning more than $200,000 stand to get back $9,075, compared with now.
A new 30 per cent marginal tax rate would apply for those earning $45,000 to $200,000.
This will reduce the income tax burden for about nine million Australians. The Australian Parliamentary Budget Office estimated the Stage Three tax cuts would cost $243billion over 10 financial years from 2024-25.
If you’re a low or middle income earner…
Australians earning less than $126,000 per year will pay more tax after the former government’s low and middle income tax offset expired.
The offset was first introduced by the Turnbull government and provided relief of up to $1,500.
It was due to end this year, regardless of who was in government.
Housing
If you’re looking to buy your first home…
Siblings and friends will be able to buy a home together under an expansion of the current First Home Buyer Guarantee.
Previously, married or de facto couples were the only dynamic eligible to apply, but Anthony Albanese has revealed he will open up the scheme to give other pairings a leg up into the housing market.
However, the cap on 50,000 annual spaces will remain in place.
Technology
If you get bombarded with SMS scams…
$10 million will be spent to help tackle the increasing number of scam SMS messages plaguing Australians.
The money will be spent to help launch a technology which should prevent scammers from mimicking brand names in texts.
$10 million will be spent to help tackle the increasing number of scam SMS messages plaguing Australians
Culture
If you’re in the media…
Up to 56 cadet journalists will be hired and deployed to 38 regional newsrooms across the nation on the government’s dime.
National Library of Australia – Trove
The government has already assured the National Library of Australia of $33 million worth of funding over the next four years.
The NLA runs a digital archive, Trove, which holds billions of resources accessible to the public.
Arts Minister Tony Burke said it was crucial the NLA was given a just amount in the budget, after what he described as years of ‘culture wars and budget cuts’ toward the sector.
‘Trove is, in many ways, Australia’s digital memory: It records and retains some of our most important stories, moments, challenges, controversies and successes in one accessible location,’ he said.
‘Whether you’re using it to look up a bit of family history, or for academic research, Trove is an incredibly important part of our national cultural institutions.’
The government has already assured the National Library of Australia of $33 million worth of funding over the next four years
If you’re seeking more information on The Voice to Parliament…
The government will launch an education campaign ahead of the referendum, expected sometime between October and December.
Environment
Australian Institute of Marine Science
The Australian Institute of Marine Science has already been guaranteed $163.4 million worth of funding in the upcoming budget.
It comes after Labor learned it was one of many projects teetering on a ‘funding cliff’ due to run out this year. Parts of the building were unusable due to mould infestations and rotting air conditioning units.
AIMS CEO Dr Paul Hardisty said the four-year funding commitment would be ‘transformational’.
‘The funding is a vote of confidence in AIMS to continue our mission to provide the knowledge which will result in the better management, protection and sustainable development of Australia’s tropical oceans,’ he said.
‘With the Great Barrier Reef and coral reefs globally facing enormous pressures driven by increasing temperatures under climate change, this investment in marine science is more important than ever.’
If you’re caught in a national emergency…
Labor will spend $10million on a national emergency warning system to ‘ping’ mobile phones which are identified as being in the path of a natural disaster.
Messages can be sent in multiple languages and temporarily override anything else a person is doing on the device at the time.
Home Affairs
If you’re planning to migrate to Australia…
There are expected to be some changes to Australia’s immigration policy announced in the Budget.
In his October mini-budget, Mr Albanese offered up an additional $576 million over four years to the department of Home Affairs for visa processing and migration.
New figures suggest Australia’s net migration is set to reach 400,000 this financial year and 315,000 next year.
And from July 1, the beginning of the financial year, New Zealanders will have an easier pathway to Australian citizenship. If a New Zealander has been living in Australia for four or more years, they’ll be eligible to directly apply for citizenship.
A new visa will also be introduced specifically for migrants from Pacific nations and Timor Leste. 3,000 spots will be allocated via an annual ballot process.
Student visas will also be relaxed to allow them to seek employment for 48 hours per fortnight.
If you’re an ADF troop considering re-enlisting…
A $400 million cash splash to lure ADF soldiers back into the fold will be announced.
The plan will offer 3,400 soldiers a $50,000 bonus if they re-enlist for an additional three years in an attempt to combat a recruitment and retention crisis.
Review
Hundreds of ScoMo’s projects could be scrapped
Projects announced under Scott Morrison’s government will be subjects of probes, with hundreds on the chopping block.
The independent review will determine which of the projects are sustainable, necessary and achievable.
Many of the government’s pillar policies have already been released and include key measures aimed to tackle the cost of living pressures without rising inflation
Emphasis on fixing ‘booby traps’
A ‘significant portion’ of the Budget will be dedicated to ‘fixing booby traps’ left by the Morrison government.
Finance Minister Katy Gallagher said Labor has discovered $5 billion worth of programs and services that the Coalition had no plans to fund.
This is on top of $4.1 billion worth of gaps in funding that were plugged in the October mini-budget.
‘It was booby trapped. Without a doubt,’ she said. ‘It’s taken us some time to uncover them because programs are ending on the 30th of June this year or next year. And we’ve worked through that, but there’s no doubt they were booby trapped.’
The current concerns centre on mental health programs, fundinhahag for eating disorder treatment, monitoring high risk terror offenders and continuing a domestic violence national partnership agreement.
‘We are cleaning up the Liberals’ Budget mess in a methodical, responsible and transparent way,’ Senator Gallagher said.
‘For example, there was no money in the budget for the agency responsible for safely storing and disposing of Australia’s radioactive waste, and there was a significant drop-off in funding to keep women and children safe online.
‘This was put simply a political strategy to dress up their pre-election budget bottom line and try to trick Australians into voting for them again.’
Senator Gallagher said there was actually no money at all in the budget for the agency, despite its responsibility to safely store and dispose of Australia’s radioactive waste
Surplus confirmed
The Labor government will post a surplus in the federal Budget in an astonishing fiscal turnaround.
The small surplus has been made possible by higher iron ore, coal and gas prices, while low unemployment reduced the welfare bill.
This would be the first Budget surplus since 2007, when the Coalition was in power before the Global Financial Crisis worsened.
Opposition Leader Peter Dutton said he, too, is predicting a surplus.
‘I think it’s obvious now that and I think it’s predictable that there will be a surplus,’ he said.
‘The revenues from royalties, company, tax receipts, etc. are through the roof and the government obviously has a big spending program.’
