Budget’s winners and losers revealed
The winners and losers of the government’s second budget in under a year have been revealed as Labor stresses it must prioritise vulnerable Australians in its bid to balance the books.
Treasurer Jim Chalmers said the budget would be back in the black for the first time in 15 years with a short-lived but slim surplus of about $4bn this financial year.
But with deficits predicted over the next four years and millions of Australians struggling with the rising cost of living, Dr Chalmers handed down a budget that tinkers around the edges despite the government claiming it will build “stronger foundations for a better future”.
Here’s what you need to know.
Nearly 12 million Australians have been promised more free visits to the doctor under a boost to Medicare designed to convince general practitioners to bulk bill their patients. The increased incentives will be paid to GPs who bulk bill children under 16, pensioners and other concession card holders.
GPs will be able to claim the higher incentives for face-to-face consultations more than six minutes in length as well as certain telehealth consultations.
More than 1.1m Australians will have their welfare payments boosted by $40 per fortnight from September 20, should parliament agree to the measure.
Despite speculation an increase would only apply to those aged 55 and over, the raised base rate will be applied to people receiving Jobseeker, Youth Allowance, Parenting Payment (partnered), ABSTUDY, Disability Support Pension (Youth) and Special Benefit.
However, this falls short of the advice of the government’s economic equality task force that had recommend Jobseeker raise to 90 per cent of the aged pension.
Australians aged 55 and over
More than 52,000 Australians aged 55 and over will benefit from the extension of the eligibility of a higher rate in the JobSeeker payment.
From September those who have been on the welfare payment for nine or more continuous months will receive an extra $90 per fortnight. This was previously only offered to those aged 60 and over.
Single parents with kids aged 14 and under
From September, about 57,000 single parents will receive an extra $176.90 per fortnight.
After a decade of internal regret over a decision to slash welfare assistance for single parents, Labor has lifted the age cut-off from eight to 14.
Previously, nearly a quarter of a million parents – mostly women – received the payment and were forced onto the lower JobSeeker rate when their child turned eight.
However, the move falls short of the advice of the government’s economic equality task force that had recommended the age return to the original cut-off of 16.
A rebadged $1.5bn package, part of a deal between the states and Commonwealth last December to bring energy prices down, will flow to more than five million eligible households and one million eligible small businesses.
Relief will be applied directly to power bills as credits rather than cash in the bank to eligible people on the pension, seniors card holders, recipients of the family tax benefit A and B. But the amount you will receive will depend on what state you live in.
Small businesses with a turnover of up to $50m will be eligible for a $20,000 tax break if they invest in energy efficiency upgrades.
Renters (but only some)
The budget has forecast rents will pick up as the rental market tightens over the year. More than 1.1 million households receiving the maximum Commonwealth Rent Assistance are set to benefit when the government beefs-up the rate to 15 per cent.
Around six million Aussies with chronic health conditions will be able to buy two months worth of medicine for the price of a single script. The government says concession card holders may save up to $43.80 and general patients up to $180 per year, per medicine. The $1.2bn in savings will be reinvested in community pharmacies.
First-home buyers will be able to team up with siblings and friends to cobble together a deposit under changes to the government’s scheme.
Australians who have not owned a property for at least 10 years, permanent residents, and single legal guardians of children will get access to the scheme for the first time.
High income earners
People earning more than $120,000 will be pleased by the decision not to wind back, or tinker with, the Morrison government-era stage 3 tax cuts. Labor has been under pressure to rein in the cuts that are set to cost $20bn a year when they come into effect in 2024.
In a bid to slow down the retention crisis in the Australian Defence Force, a $50,000 bonus will be offered to soldiers, sailors and aviators who re-enlist for another three years.
The temporary skilled migration income threshold will be lifted from the current rate of $53,900 to $70,000, reflecting the level it would have reached if it had been indexed to wages a decade ago.
Low and middle income earners
A Morrison government-era low and middle income tax offset (LMITO or sometimes affectionately known as “the lamington”) was not revived after being axed in the October budget. It was always designed to be temporary and replaced by the stage 2 tax cuts, but Aussies will still notice when they’re not given the break worth up to $1500 come tax time.
For many who don’t have a child, aren’t on a welfare payment and are over the age of 16, they will miss out on the so-called “centrepieces” of Labor’s budget. They are ineligible for the energy bill relief, won’t benefit from the GP incentives and won’t receive any increase to rent assistance.
The budget papers acknowledge the increased pressure on renters, but other than an increase in payments for the most vulnerable, renters can’t expect a handout. The government says that other measures to boost the supply of housing, such as their build to rent scheme, will help boost the supply of housing.
Big oil and gas producers will have their tax deductions capped and face tougher tax compliance measures as part of a budget crackdown estimated by Treasury to raise $2.4bn 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.
A surge in young people vaping has led to the government spending $750m to combat recreational vaping. Measures include a ban on all single use and disposable vapes, a ban on the sale of vapes in convenience stores and other retail settings, targeting the black market, increasing minimum quality standards, and requiring pharmaceutical-like packaging.
A Morrison-era Covid stimulus measure that allowed small businesses with a turnover of under $5bn to write off assets of an unlimited rate.
The measure was due to expire on June 30 and in its place is a new write off program for businesses with an annual turnover of less than $10m. It means that small businesses will be able to immediately write off eligible assets of less than $20,000. However, business owners will be able to deduct the cost of multiple eligible assets across the year. It’s understood this returns the write off measure back to pre-pandemic levels.
National Disability Insurance Scheme
Announced at the last meeting of national cabinet, the state and federal governments have agreed to cut the growth rate of the scheme from 14 per cent to 8 per cent. A package worth $732m was included in the budget over the next four years to fund staff increases and reforms required to tame costs.
More than 30 projects have been either gutted, delayed or scrapped in a bid to save $7.8bn. That funding will be reprioritised as part of a $19bn reinvestment (fully offset from Defence’s current budget) to help fund the recommendations of the Defence Strategic Review.
A winner in the October budget, the government hasn’t put aside any new money in aid to send to Ukraine. Instead, the budget papers say the $189.6m over two years will be met by Defence’s existing budget and “funding already provided for by the government”.