Budget 2023-24: What we know so far, before Treasurer Jim Chalmers’ speech
Treasurer Jim Chalmers’ second federal budget will be unveiled on Tuesday, with cost-of-living relief at the top of the agenda.
Dr Chalmers said on Sunday night the centrepiece of the Albanese government’s second budget will be a $14.6 billion package for cost-of-living relief to ‘‘ease pressure’’ on Australians.
‘‘Our cost-of-living plan will directly lower price pressures and the CPI in 2023-24 and will not add to broader inflationary pressure in the economy,” Dr Chalmers said.
‘‘This is in addition to $11.3 billion to support a 15 per cent increase to award wages for aged-care workers (majority of funding was provisioned in October budget) and improved paid parental leave and cheaper child care’’ beginning on July 1.
He said the three-part plan works by:
- Addressing immediate challenges with responsible cost-of-living relief
- Creating more opportunities by investing in health, aged care, advancing women’s economic equality and delivering better services
- Laying the foundations for a stronger, more secure economy by investing in energy transformation, skills and national security and showing restraint to make our finances more sustainable.
The Treasurer will begin his budget speech at 7.00pm on Tuesday.
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Although there are likely to be a few surprises, there’s plenty we already know about what he will say.
Budget 2023-24: Spending
Several large budget measures that are expected to be handed down but have not been officially announced include:
- An increase in the rate of JobSeeker for Australians aged over 55
- Wider eligibility for Commonwealth single parenting payments
- An above-inflation increase in rent assistance for vulnerable families.
However, some spending priorities have already been announced by the government, including:
- $3 billion for energy bill relief, including caps on coal and gas prices negotiated with states and territories
- More aged-care funding, rising from $24 billion to $29 billion in 2023-4 and to $36 billion by 2025-26, most of which will fund a 15 per cent pay rise for workers
- A $55.3 billion boost to childcare subsidies over four years that will benefit 1.2 million families
- Changes to Medicare that will extend script lengths and spend $2.2 billion extra on broader reform
- $737 million to implement a new crackdown on tobacco and vaping products
- $400 million to fund retention bonuses for defence force workers
- An extra $3.7 billion in funding for a National Skills Agreement, bringing total spending to $13 billion
- About $2 billion in new funding for the construction of additional social and affordable housing.
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The government is expected to unveil spending related to several policy priorities, including establishing an Independent Commission Against Corruption and the Voice referendum.
Budget 2023-24: Savings and upgrades
The government has also announced a few savings measures and will benefit from an expected upgrade in the bottom line from higher-than-anticipated commodity prices and lower unemployment.
Deloitte Access Economics predicts an upgrade in tax receipts of about $83 billion over the next four years will be booked, “delivering an astonishing turnaround in the government’s fiscal position”.
“Deficits will be much lower, but it’s all temporary revenue,” DAE partner Stephen Smith told The New Daily.
“In the longer term, if you assume more normal levels of company tax revenue, we’ve got a deteriorating budget.
“There’s some very large and rapidly growing spending programs like the NDIS [National Disability Insurance Scheme].”
Savings measures set to be booked in the budget include about $3.3 billion in extra revenue from an increase to tobacco tax over three years.
Additional savings are expected to be drawn from tinkering with petroleum resources rent taxes and the crackdown on multinational tax avoidance too.
