Winners and losers from the October Federal Budget
Treasurer Jim Chalmers' first Federal Budget, and the first from a Labor government in almost a decade, has officially been delivered.
There was no hiding the economic realities currently facing the country though, with the Treasurer describing the budget as one that makes "hard decisions for hard times" in order to avoid fueling the inflationary fire even further.
"While our economic policies put a premium on resilience, our fiscal strategy puts a premium on restraint. This is important - to keep spending under control, to give ourselves a better buffer for any further downturns, and to make sure we are not adding to inflation."
So where is the government spending and cutting back, and which groups of Australians are likely to benefit or miss out? Here's a look at some of the winners and losers of the October 2022 budget:
Child care reform was a major part of Labor's policy platform going into the election, so it's no surprise that it featured heavily in the budget with the government set to inject $4.7 billion over four years from 2022-23, and then $1.7 billion each year after that, to help reduce costs.
Most of the funding will go towards lifting the maximum Child Care Subsidy rate from 85% to 90% for the first child in care, but $43.9 million will be allocated to help improve early childhood outcomes for First Nations children and $10.8 million will go towards an ACCC-led inquiry into the cost of child care.
The budget also outlined $531 million which will be spent over four years on reforming parental leave, including an increase to the maximum amount of leave able to be taken from 20 to 26 weeks. The change won't kick in until July 2024 though, with the government increasing maximum leave by two weeks a year until the full 26 weeks comes into play in July 2026.
"An increase in the child care subsidy and paid parental leave has the capacity to transform the wellbeing of Australian children, women and families," says Georgie Dent, executive director of advocacy group Parenthood.
"These reforms are not just good for children, women and families, they are good for the economy too."
TAFE and university students
Hundreds of thousands of Australians pursuing tertiary education for in-demand vocations are also set to benefit from funding outlined in the budget.
The government has committed $872 million over the next five years to fund 480,000 fee-free places for TAFE students in industries and regions experiencing skills shortages, with roughly 180,000 places to become available in 2023.
20,000 extra Commonwealth supported university places will also be made available in 2023 and 2024 via $486 million in additional funding over the next four years. The places will be dedicated to students who are under-represented in higher education who are looking to study teaching, nursing, engineering and other areas which are currently experiencing skills shortages.
There was plenty of focus on housing in the budget, with the government committing billions of dollars towards new home building and ownership initiatives.
Among those initiatives, the Treasurer outlined a lofty goal to build one million new homes over five year starting in 2024 via a national Housing Accord between government, industry and investors. The government has committed an initial $350 million in the budget for the creation of 10,000 new affordable homes, with the states and territories also set to fund a further 10,000.
Linda Scott, Chair of CareSuper, is among those to have already come out in support of the initiative.
"The Accord holds the promise of ensuring the provision of housing for Australia's future can align with the financial interests of our CareSuper members to deliver on the pressing economic and social needs to house our nation."
In addition, the government is still promising to invest $10 billion in the Housing Australia Future Fund which aims to create 30,000 social and affordable homes over five years.
$324.6 million has also been set aside over four years from 2022-23 to fund the Help to Buy Scheme - a shared equity initiative that would assist up to 40,000 prospective homeowners (10,000 each financial year) purchase a property sooner with a smaller deposit.
Funding to the tune of $1.7 billion has also been committed in the budget towards a variety of initiatives aimed at ending violence against women and improving women's safety.
$169 million will be dedicated over four years (and $55 million per year afterwards) to fund an additional 500 service and community workers across the country who will provide support for women and children experiencing family, domestic and sexual violence.
The Escaping Violence Payment will also be boosted with $39 million in funding in order to keep up with greater demand and $32 million will go towards funding Working Women's Centres which will provide free information and assistance on issues of discrimination and pay equity.
Electric vehicle owners
Electric vehicle owners also look set to benefit from a number of budget measures, including the $345 million Electric Car Discount which would potentially reduce the cost of purchasing battery, hydrogen fuel cell and plug-in hybrid electric cars by thousands of dollars by exempting them from both fringe benefits tax and customs duty.
Legislation is currently before parliament to enact the changes which, if passed, would apply retrospectively to electric vehicles purchased or used after July 1, 2022.
Just under $40 million has also been included in the budget over five years to establish a National Electric Vehicle Charging Network with the NRMA, with the network aiming to deliver 117 new fast charging stations on highways across the country.
Tax dodgers and tax reform
Labor took a policy of reducing the rates of multinational tax avoidance to the election, so it's not a surprise that it's provided funding to crack down on both individuals and companies in the budget. According to the government, this additional funding will help claw back billions over the next few years.
To achieve those savings the government has allocated $80 million to extend the ATO's Personal Income Taxation Compliance Program for two years from July 2023, plus it will provide a $200 million funding boost over four years for the ATO's Tax Avoidance Taskforce.
The government has received criticism for failing to address larger issues with the tax system in the budget though, with many calling for urgent reform.
"For the tax and transfer system to not only be fair and efficient, but to work effectively in its role underpinning our economic health, we need to have frank conversations about fundamental, holistic reform. And those conversations need to lead to action, sooner and not later," says Scott Treatt, general manager of tax policy and advocacy at The Tax Institute.
House energy costs
While the government has pointed towards greater child care subsidies and lower medicine costs under the Pharmaceutical Benefits Scheme as measures that will help out with the cost of living, households dealing with soaring energy costs were left without any direct relief in the budget.
That's despite Treasury forecasting that electricity prices are likely to rise by 20%, on average, by end of the year and then a further 30% in the 2023-24 financial year.
More broadly, some advocacy groups have responded to the budget by saying that there is inadequate support for households dealing will rising living costs across multiple fronts.
"People on the lowest incomes are facing multiple and unrelenting crises right now - extreme weather events, rising rents, food and fuel costs, and the prospect of more losing their jobs means that government must deliver on lifting incomes and social and affordable housing," says chief executive of the Australian Council of Social Service, Dr Cassandra Goldie.
"Instead of spending money on stage 3 tax cuts, we could lift incomes, including jobseeker and disaster recovery payments, fund social housing, and adequately fund community services so they can help people when they need it most. These are the very essentials at the heart of a wellbeing budget, and what so many in our community need to get through difficult times."
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