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Budget 2023 – preliminary analysis

 

May 10, 2023

Dear Supporters, 

How a people’s government raises funds and how it prioritizes its spending, says a lot about who we are as a society and a nation. Like many of us, I was hoping the Albanese government would put the heart back into the budget and hence into our society. Nurses working in aged care, families needing help with childcare fees and people who rely on one or more of 320 medicines that will halve in cost this year, these are the winners. But for our climate, for youth and for refugees, there is scant. And what’s more this is NOT a budget that is going to fix our housing crisis. I went looking but didn’t see any costings on certain spends such as (thank you Crikey) AUKUS and Nauru offshore processing costs. 

I’ve decided to try providing a running brief of Budget 2023 against our three shared values:  improved fairness, better integrity, and an inclusive, humane, and respectful nation where we feel we all belong. Read on to see how I think the government fared with Budget 2023 –24 and let me know what you think. 

Why a surplus?  

The $4b surplus comes from the government earning more tax ($40b more than they expected in October 2022 and $143b more over the forward estimates) from personal income earners (due to almost full employment) and company revenues (driven very strongly from the Russian invasion of the Ukraine and the uptick this has provided our resources sector). If this surplus eventuates it would be the first since 2007-08. 

Is it inflationary? 

According to Commonwealth Treasury, no. This budget is essentially a $14b cost of living relief package. Some of the measures are sugar hits and others are much more strategic and sustainable. As an example, the government has addressed energy prices by capping the profits of coal and gas exports (raising a further $2.4b in revenue) and, via state and territory governments, provided rebates to households on their energy bills. Those two actions tackle energy price pressures for example, reduce overall spending on household bills and are typically anti-inflationary. Naturally, some of those savings will then be spent on other discretionary goods and services but only in part. This government has banked over 80% of the windfall – demonstrating budgetary constraint balanced against the need to help those most impacted by inflation and other cost of living pressures. 

Does it enhance fairness? 

Some measures that could be considered to improve fairness include: 

  • $14 billion over 4 years to the vulnerable 
  • Tripling of incentives for doctors to bulk bill 
  • Increases in rent assistance for lower income earners 
  • A very modest increase in job seeker ($2.84 a day doesn’t necessarily help someone get a job) 
  • Halving the cost of around 320 medicines on the PBS, including those for type 2 diabetes, depression, asthma and high cholesterol.  
  • $300 million towards energy upgrades for people living in social housing and $1 billion for around another 110,000 householders to access low interest loans for adding solar and double-glazing (there are nearly 10 million homes in Australia).  
  • A long-awaited pay rise for registered and enrolled nurses working in aged care of more than $10,000 and $7,500 respectively.  

Some of the measures that could be considered to detract from fairness include: 

  • $69 billion over 4 years to high income earners, with those over $200,000 in annual income earning $9,000 in tax relief compared to just a few hundred dollars a year for someone on a low income. 
  • Student debt remains prohibitive, with no relief announced.  
  • Single parents – still half of what’s being offered to wealthier income earners via the forthcoming Stage 3 tax cuts. 

Does it promote stronger integrity? 

Definitely not. There is some increase in funding to the Australian National Audit Office, but with the size of forecast government procurement, especially in defence, there is a question as to its adequacy, given that the previous government underfunded the ANAO. Similarly, there is an increase in funding for the Australian Information Commissioner, but not in its responsibility for Freedom Of Information processing. 

I’ve been generous to pull out a few areas where I think there’s been some ground made but given this government was elected on an agenda of restoring integrity to our parliamentary systems, the addition of one extra staffer for all MPs in their electorate office (which also applies to crossbench members) is all that has been provided as additional resources to keep government accountable. It's not enough, especially for the crossbench.

Independent Media 

We should be able to aim higher rather than be grateful for the $7.7 billion guarantee provided to the ABC and the SBS within a new five-year funding cycle. There is also additional funding being provided to the AAP and to the transmission infrastructure in the Pacific. 

A Voice to Parliament 

The federal government has committed more than $360 million over three years to deliver the Indigenous Voice to Parliament referendum, including money for civics campaigns and an increase of $10.5 million for more mental health supports for First Nations people during the referendum.  

Tax deductibility has been granted for organisations such as Recognise a Better Way to help with financing its A Voice To Parliament No Vote campaign. 

Our Climate 

The Petroleum Rent Resources Tax clawback is welcomed but it is not enough, raising an estimated $2.4b over 4 years. It is insignificant compared to the initiative recently announced in the UK. We need to stop subsidising the fossil fuel industry altogether.   

Multinational Tax 

There are no funded initiatives to target multinational corporations operating in Australia to pay corporate tax here. 

Sports  

Sports funding continues to go to elite sporting institutions and projects ($3.4 billion over 10 years ahead of the Brisbane Olympics) and not to communities where most people enjoy and benefit from participating in sport. These community-based sporting organisations are also feeders for future elite sports people and deserve a larger piece of the pie. For example, Ku-ring-gai Council is considering raising rates to help fund (in part) the building costs of the basketball facilities at St Ives High School.  

Does it help people feel that they are safe, valued and that they belong?  

This area experienced some gains over the previous decade, but there is nothing here that will help our youth feel any sense of value in their future – not in housing affordability nor higher education placements and fees. Furthermore, assistance focused on our region is skewed heavily to defence ambitions over humanitarian and disaster preparedness. If you’re interested in helping family members study, work or settle in Australia, things also just got a whole lot harder and more expensive.  

Families 

The government is making good on an election commitment to boost childcare subsidies – which will take affect from July 1. It is great for people on a household income of below $530,000 (I hope that’s most people because I am clearly not being paid enough otherwise). For families earning less than $80,000 (ouch, that’s really tough in Bradfield), the subsidy for child 1 jumps to 90%. 

Those living with a disability 

The NDIS is not the only thing defining people living with a disability and their carers; but it’s significant for so many of us. According to the ABC, the NDIS is one of the fastest growing areas of spending in the budget but there is relatively little change to it this time around.  

There will be more money to the NDI Agency, 12-month plans will now be longer term and more flexible. There will be resources to increase the capability of the agency running this. But this is a far cry from what I heard on the campaign trail, that the NDIS needs to be governed by the people it serves and that the system should be flipped on its head, with more input from local voices. 

$48.3 million will be allocated towards tackling fraud. 

Renters 

The maximum rate of Commonwealth Rent Assistance will be lifted by 15%, costing the government about $700 million a year. 

$10b will be put into a special vehicle (off budget) to invest in building new, affordable housing. But naturally, these won’t be built for years to come. The Greens are asking for a rent-freeze so those renting can enjoy more immediate benefits to mitigate rent hikes. 

Small business owners 

A surge in interest rate and rents increasing, will likely reduce consumer confidence. So this budget matters to you if you own and run a small or medium-sized business. 

Up to $650 will be paid to small businesses in energy bill relief as the government seeks to neutralise price rises for this year and 2024. 

From July 2026, you’ll be required to pay employee super on payday, rather than quarterly which means you have three years to work out your business cashflow and revise accounting systems. 

The instant asset write-off for items of $20,000 or less (for businesses with less than $10m in yearly turnover) will continue until the middle of next year.  

A bonus tax discount will be available to help business electrify. Those small businesses will be able to claim 20% of spending that supports electrification or more efficient energy use on their taxes, including electrified heating and cooling, more efficient white goods, induction cooktops and installing batteries and heat pumps.  Of course if you’ve already dipped into your own earnings to pay for these updates, you won’t be benefiting from this initiative. If you have not yet, this is a great opportunity to get on with it! Check out Better Business Partnerships as well. 

Youth 

Not much here guys! No new money for TAFE; no news on student loan support. Austudy and Youth Allowance are lifted by $40 a fortnight. 

Women 

Single parenting payment (91% of which goes to women) lifts eligibility to include single parents with a child up to 14, rather than 8 years of age. The rate remains unchanged.  

There is not much focused at women’s health despite the extra health and medical costs borne by women over their various life stages (reproductive health for example). 

The Treasurer noted that "The majority of people aged 55 and over on JobSeeker are women, many with little to no savings or superannuation, and who are at risk of homelessness.” This is the rationale for dropping the age for JobSeeker from 60+ to 55+ for extra support.  

New Migrants 

Cost of applying for a visa will rise 6% and if you’re on a working holiday visa or other short-stay visa, the rises will total 21% on application fees. 

International Students 

Student visa holders will be restricted to working a maximum of 48 hours a fortnight including those working in aged care from end of the year. The eligibility covering those allowed to study on a student visa will be changed to clamp down on the number of people using this as a pathway to permanent residency (over getting an education).  

Our Neighbours 

Seventy-five percent of the $19b new spend over five years will go to increasing defence and security presence in the Pacific. The remainder shall be spent on seasonal working visas for people from Pacific countries and humanitarian relief and disaster preparedness.  

Are you a winner or a loser? 

As always, check out how you and your family fairs with the ABC’s analysis of the budget winners and losers here 

I hope you found this quick commentary on the 2023-4 Budget useful. I will be diving deeper into it over the next few weeks, as well as to the responses by the Liberal National Opposition, The Greens and the rest of the crossbench.  

If you want to make sure you are a winner next time around, please be sure to volunteer, donate and/or vote for me in the next general election. And tell your friends too. Only by working together can a community independent benefit our community.  And it’s this invitation I extend to make us all winners. 

 

Regards, 

Nicolette Boele 

Sources: ABC, Crikey, Guardian, Budget Papers 1 & 2, Budget Overview 

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