From $250 cash handouts to six million people to temporary relief at the petrol bowser and there are plenty of sweeteners in Treasurer Josh Frydenberg’s budget.
Here’s a look at the winners and losers from the 2022-23 federal budget:
Winners
Workers and jobseekers
The treasurer opened his budget speech on Tuesday night by touting the nation’s unemployment rate. It’s currently at four per cent - "the equal lowest in 48 years" - and it’s set to fall even further to 3.75 per cent in the September quarter.
The tight labour market is good news for workers and those looking for work.
Wage growth is also tipped to "accelerate to its fastest pace in almost a decade", with growth in the Wage Price Index forecast to increase from 2.75 per cent in 2021-22 to 3.25 per cent in 2022-23.
"Broader and more representative wage measures are picking up more quickly as workers take advantage of the tight labour market, with average earnings per hour expected to increase by five per cent through the year to the June quarter of 2022", the budget papers say.
Defence and national security is a key plank of the 2022-23 budget, with the government warning that the rules-based international order is "under threat" as "the world has entered a period of escalating strategic competition".
“We are seeing this occur in our region and globally, particularly with an increasingly assertive China,” the government says.
In response, the 2022-23 budget contains a massive $9.9 billion to develop Australia’s offensive and defensive cyber capabilities, with the program dubbed REDSPICE (Resilience, Effects, Defence, Space, Intelligence, Cyber, and Enablers).
Australia's defence spending will rise to $48 billion in 2022-23, nearly 2.2 per cent of GDP, up from $44.62 billion (2.1 per cent of GDP) in 2021-22.
Afghan refugees
Afghans fleeing the Taliban will have a greater chance of finding a new home in Australia, with the government offering 16,500 humanitarian visas for Afghan nationals across four years from 2022-23, to address the need for places following the Taliban’s return to power.
These places will be offered on top of the existing 13,750 annual global places a year available under the humanitarian visa program.
Low- and middle-income earners
The government is promising “temporary and targeted” relief for Australian households and businesses facing cost of living pressures “as a result of the pandemic, the invasion of Ukraine and extreme weather events”.
This includes a $420 cost of living tax offset for more than 10 million low- and middle-income earners.
It will be available from 1 July 2022 when people submit their 2021-22 tax returns. This one-off payment is estimated to reduce tax receipts by $4.1 billion over the forward estimates period.
Source: SBS News
Pensioners and concession card holders
A $250 cost of living payment will also be paid to eligible Australian pensioners, welfare recipients, veterans and concession card holders.
It will be paid automatically to six million people at a cost of $1.5 billion. More than half those who will benefit are pensioners.
The economy
Forecasts for economic growth have been revised upwards in this budget, driven by “stronger-than-expected momentum in the labour market and consumer spending”.
Real GDP is expected to grow by 4.25 per cent in 2021-22, 3.5 per cent in 2022-23 and 2.5 per cent in 2023-24, 2024-25, and 2025-26.
As the cost of fuel soars past $2 per litre, drivers can expect some relief from high prices, with the government halving the excise duty for petrol and diesel from midnight tonight for a period of six months.
This means a saving of 22 cents per litre at the bowser for drivers, which will come at a cost of $3 billion to the nation’s underlying cash balance. The government says the excise cut will deliver an average benefit of around $300 to households with at least one vehicle.
Treasurer Josh Frydenberg argued that the cut to the fuel excise will help families and put "downward pressure on inflation".
"This is a temporary measure, it’s only there for six months … but it will provide cost of living relief now," he told reporters.
The consumer watchdog says it expects retailers to "pass on the cut in fuel excise to reduce the price at the bowser as soon as possible".
"In light of today’s announcement, our petrol team will focus on this price monitoring work for the next six months to determine how retailers are passing through the excise reduction to consumers," ACCC chair Gina Cass-Gottlieb said.
"We will contact petrol retailers to set out our clear expectations that the savings are passed on to consumers and advise them that we will be monitoring their margins."
Small businesses
Small businesses struggling with worker shortages are expected to benefit from an increase of 10,000 skilled migrant places.
There are also an additional 11,000 places for prospective backpackers in the 2022-2023 financial year.
Regional Australia
The government is promising to pour $7.1 billion into "transformational infrastructure to help Australia push into new frontiers of production and growth", focusing on four regions that are considered key to boosting "our national prosperity". The funding includes:
- $2.6 billion for infrastructure that “unlocks the Northern Territory’s exports through Darwin’s gateway to Asia. A further $300.6 million from the Government’s $8.9 billion National Water Grid Fund will help improve water security in the greater Darwin region.
- $1.7 billion for water infrastructure and supply chain projects in North and Central Queensland.
- $1.5 billion in the Pilbara region to help diversify the north-west economy by increasing low emissions production.
- $750 million for the Hunter region for transport and port infrastructure projects that will improve supply chain efficiency and boost exports.
Losers
Renters and people priced out of the housing market
Home prices and rents are soaring in many parts of Australia, and the government is pumping millions into schemes to help thousands of Australians get a foothold in the housing market.
But economist Gabriella D’Souza says these schemes will do little to improve housing affordability and make home ownership a reality for most people.
"When we’re seeing the median house price in major cities get to or exceed $1 million, it’s a mere drop in the bucket," she said.
The environment
From bushfires to floods, Australia has been ravaged by extreme weather events in recent years, but the term “climate change” appears just once in the budget papers.
“Australia is on the pathway to net zero emissions by 2050 and playing its part in responding to the critical global challenge of climate change. Technology, not taxes, will get us there,” Mr Frydenberg said in his Tuesday night address.
The arts
The arts sector was one of the hardest-hit by COVID-19 and is still struggling to recover, but there was little help at hand in the 2022-23 budget, with spending set to be slashed in coming years.
Funding for the arts will fall from $989 million in 2021-22 to $799 million in 2022-23, and even further to $736 million in 2023-24, the budget papers show.
