Treasurer Jim Chalmers handed down the Labor Government’s 2023-24 Federal Budget last night, and there’s a lot to unpack.

Aided by elevated commodity prices and strong jobs numbers, the Federal Government is expecting to eke out a surplus this financial year — the first time this will have been achieved in 15 years.

This may very well give the Labor Government scope to support Australians buckling under the cost of living crisis, but Chalmers stressed that restraint was necessary to avoid pouring more fuel on the inflation fire.

Below we recap some of the key measures proposed in the 2023-24 Federal Budget that may be relevant to you.

Please note: These key proposed policy measures, and the information relating to them, have been sourced from the 2023-24 Budget papers. And, they are yet to be passed as legislation and may be subject to change.

Easing cost of living pressures

Cheaper medicines

• The Pharmaceutical Benefits Scheme (PBS) will be revised to ensure scripts for a number of common medicines are dispensed in greater amounts, less often. From 1 September 2023, the Government will phase-in increases to the maximum dispensing quantities allowed for more than 300 Pharmaceutical Benefits Scheme medicines. The Government has noted that this will allow some patients to receive 60 days’ worth of the medicine they need for a stable, chronic health condition, rather than the current amount of 30 days’ supply.

Rent assistance

Strong rental growth has put renters at the centre of the cost of living crisis. To help alleviate the pressures many are facing, the Government will be increasing the maximum rates of Commonwealth Rent Assistance by 15 per cent from September 2023. The measure will cost $2.7 billion over 5 years and is expected to support 1.1 million households receiving Commonwealth Rent Assistance. According to the Government, this is the largest increase to Commonwealth Rent Assistance in more than three decades.

Energy bill relief

The Government has earmarked $3 billion to help households and small businesses struggling with their energy bills. From July 2023, it will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses.

Eligible households and small business customers include pensioners, Commonwealth Seniors Health Card holders, Family Tax Benefit A and B recipients and small business customers of electricity retailers.

Superannuation

Increasing the payment frequency of the Superannuation Guarantee (SG) and investing in SG compliance

In a bid to crack down on non-compliant employers and make sure Aussies’ super balances are where they should be, the Government will require employers to pay their employees’ SG entitlements on the same day that they pay salary and wages, starting 1 July 2026. The tax office has admitted that the previous quarterly payment schedule leaves employees vulnerable to being shortchanged on their super payments, with an estimated $3.4 billion worth of super going unpaid in 2019-20.1

Better targeted superannuation concessions

Starting 1 July 2025, the Government will reduce the tax concessions available to individuals with total super balances of more than $3 million. The decision will apply to around 80,000 Australians, who will see their concessional tax rate on earnings increase from 15 per cent to 30 per cent for earnings corresponding to the proportion of their total super balance that is greater than $3 million. According to the Budget documents, this reform is intended to ensure generous superannuation concessions are better targeted and sustainable.

Social security

JobSeeker, Austudy and Youth Allowance

The Government will provide $4.9 billion over 5 years from 2022–23 (with $1.3 billion per year ongoing) to increase support for people receiving working age payments including the JobSeeker Payment. This measure will:

• Increase the base rate of working age and student payments by $40 per fortnight. This will apply to the JobSeeker Payment, Youth Allowance, Parenting Payment (Partnered), Austudy, ABSTUDY, Disability Support Pension (Youth), and Special Benefit. It will commence on 20 September 2023.
• Extend eligibility for the existing higher single JobSeeker Payment rate for recipients aged 60 years and over to recipients aged 55 years and over who are on the payment for nine or more continuous months.

Single parent payment

Single parents may benefit under a $1.9 billion plan to extend eligibility for the Parenting Payment (Single) until the youngest child is 14. Currently, single parents are only eligible to receive the payment until their youngest child turns eight, at which point they’re shifted to the much lower JobSeeker payment. The change will mean an extra $176.90 per fortnight for JobSeeker recipients who become eligible for the payment.

Strengthening Medicare

As part of the Government’s initial response to the Strengthening Medicare Taskforce recommendations, $5.7 billion has been allocated to initiatives to rebuild and strengthen Medicare over five years. Of this amount, $3.5 billion will be directed towards tripling bulk billing incentives for patients aged under 16 years, pensioners and other Commonwealth concession card holders.

To address concerns around the accessibility of primary care, the Government is committing to:

• $445.1 million over five years for improving collaboration between GPs, nurses and allied health professionals
• $143.9 million over two years to support after hours GP availability
• $98.9 million over four years to support general practices in caring for frequent hospital users
• $79.4 million over four years to Primary Health Networks, an amount which will be used to connect allied health services with people with chronic conditions in underserviced communities
• In addition to this, the Government will be increasing the Medicare rebate for standard consultations with nurse practitioners and participating midwives.

The Government will invest $824.4 million to support the development of digital health systems, as part of plans to modernise the My Health Record system and improve coordinated care. This will include the MyMedicare initiative, which is a voluntary scheme that will provide both patients and primary care teams with comprehensive information about their medical histories.

Aged care

Pay rise for aged care workers

A major centrepiece of this year’s Budget is an $11.3 billion package aimed at boosting the pay of aged care workers to better reflect the work they do. More than 250,000 aged care workers (including registered nurses, enrolled nurses, and home care workers) will see their wages increase by 15 per cent from 1 July 2023 — which the Government notes is the largest increase to award wages in a work value case under the Fair Work Act.

The pay rise is estimated to attract 10,000 more workers to the aged care sector, which the Fair Work Commission has acknowledged has been historically undervalued. It will also hopefully bring the Government a step closer to fulfilling its election promise of having a registered nurse on duty 24/7 in every aged care facility.

Aged care regulatory reform

The Government will provide additional funding of $309.9 million over 5 years from 2022–23 to implement the recommendations from the Royal Commission into Aged Care Quality and Safety and other initiatives to strengthen the regulation of the aged care sector and improve the health and safety of older Australians receiving aged care. Funding includes, for example:

$139.9 million over four years from 2023–24 to improve the accountability and transparency of approved aged care providers through enhancements to the Star Rating system
$12.9 million over two years from 2023–24 to improve food and nutrition in aged care through the development, monitoring and enforcement of food and nutritional standards.

Supporting small businesses

Small Business Energy Incentive

Up to 3.8 million small- and medium-sized businesses will be eligible for up to $20,000 in tax relief when they invest in eligible technologies to make their businesses more energy efficient (such as converting from gas to electricity, switching to more efficient electrical goods, and installing batteries and heat pumps). The incentive will apply to businesses with an aggregated annual turnover of less than $50 million, and eligible assets will need to be first used or installed and ready for use between 1 July 2023 and 30 June 2024.

$20,000 instant asset write-off

For businesses with aggregated annual turnover of less than $10 million, the Government will temporarily increase the instant asset write-off threshold to $20,000 from 1 July 2023 until 30 June 2024. This will allow small businesses to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between these dates.

The $20,000 threshold will apply on a per asset basis, so small businesses may have the opportunity to instantly write off multiple assets. As for assets valued at $20,000 or more (which cannot be immediately deducted), these can continue to be placed into the small business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each income year thereafter.

Housing

Family, friends to team up to buy property

In a shake-up of the Home Guarantee Scheme (HGS) aimed at helping more Australians get on the property ladder, eligibility will be expanded to allow any two eligible people to be joint applicants for a guarantee beyond spouses and de facto partners — a move which could give friends and family members the chance to team up to buy a first home.

Other changes to the Home Guarantee Scheme will include:

• Allowing non-first home buyers who have not owned a property in Australia for at least 10 years to access the First Home Guarantee and Regional Home Guarantee
• Allowing a single legal guardian of children to access the Family Home Guarantee
• Allowing Australian permanent residents to access the Scheme.

The HGS — which includes the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee — seeks to enable eligible home buyers with a deposit between 2 and 5 per cent (depending on the scheme) to purchase a home, with the Government guaranteeing enough to cover the 20 per cent deposit that lenders typically like to see.

First Nations

Delivering the Referendum to Recognise Aboriginal and Torres Strait Peoples in the Constitution Through a Voice to Parliament

The Government will provide $364.6 million over three years from 2022–23 to deliver the referendum to recognise Aboriginal and Torres Strait peoples in the Constitution through a Voice to Parliament. Funding includes, for example:

• $336.6 million over two years from 2023–24 for the Australian Electoral Commission to deliver the referendum, including $10.6 million to produce information pamphlets for the ‘yes’ and ‘no’ cases for distribution to all Australian households.

Supporting teachers and students

The Government will fund a number of initiatives aimed at supporting teachers and students, including a $9.3 million investment to help with attracting new teachers and increasing rates of retention.

Central Australian schools will receive a $40.4 million boost to improve student attendance, engagement and learning outcomes, and $38.4 million will be earmarked to pilot community-led and culturally appropriate distance learning models in remote locations.

Energy transition

The Government will establish a new national Net Zero Authority to help guide the net zero transformation. The Government has noted that it will ensure workers in emissions-intensive sectors are supported throughout the transition, as well as encourage communities, companies and investors to take advantage of new clean energy opportunities as they emerge.

Defence spending

The Government will make a number of investments geared towards strengthening sovereignty and security in the Indo-Pacific region. Some key investments include:

• The acquisition of conventionally armed, nuclear powered submarines as part of the AUKUS pact
• The establishment of the Advanced Strategic Capabilities Accelerator to develop advanced defence technologies
• Financial support for the Australian Defence Force aimed at improving recruitment, workforce development and retention.

Infrastructure

Better cities and more liveable suburbs

The Government will allocate $159.7 million towards transforming cities and suburbs as part of the urban Precincts and Partnerships Program. Another $211.7 million will fund the Thriving Suburbs Program, which will provide investment in community and economic infrastructure that enhances liveability and prosperity in suburban communities.

Hobart stadium

The Government will be chipping in $240 million for a multipurpose stadium in Hobart, which would support Tasmania’s bid to become the 19th team in the Australian Football League. The project will cost $715 million all up, with the remaining amount coming from the Tasmanian government, the AFL, and “borrowings against land sale or lease for commercial uses.”

Tobacco and vaping

The Albanese Government will make a number of investments with the goal of reducing smoking and vaping, particularly among younger Australians. These will include:

• $63.4 million to fund a public health information campaign to discourage vaping and smoking
• $29.5 million to increase and enhance supports to quit
• $263.8 million to invest in a new national lung cancer screening program
• $141.2 million to expand the Tackling Indigenous Smoking (TIS) program.

Starting 1 September 2023, the Government will also be raising the tax on tobacco by five per cent (in addition to ordinary indexation) each year for three years, as well as ensuring that loose leaf tobacco is taxed the same as cigarettes, in a bid to encourage smokers to quit.

Amending measures of the former Government

The Government will amend measures announced by the former Government to provide greater certainty to taxpayers. The Government will, for example:

• Amend the start date of the 2016–17 MYEFO measure: Tax integrity – franked distributions funded by capital raisings from 19 December 2016 to 15 September 2022
• Amend the non-arm’s length income (NALI) provisions which apply to expenditure incurred by superannuation funds by
  • limiting income of self-managed superannuation funds and small Australian Prudential Regulation Authority (APRA) regulated funds that are taxable as NALI to twice the level of a general expense. Additionally, fund income taxable as NALI will exclude contributions.
  • exempting large APRA regulated funds from the NALI provisions for both general and specific expenses of the fund.
  • exempting expenditure that occurred prior to the 2018-19 income year.

The Government will also not proceed with 3 separate patent box measures announced by the former Government in the 2021–22 and 2022–23 March Budgets.

Other policy measures

The Government will:

• Sunset the eligibility of plug-in hybrid electric cars from the fringe benefits tax exemption for eligible electric cars. This change will apply from 1 April 2025.
  • Arrangements involving plug-in hybrid electric cars entered into between 1 July 2022 and 31 March 2025 remain eligible for the Electric Car Discount.

• Provide $17.6 million over 4 years from 2023–24 (and $4.4 million per year ongoing) for the Australian Securities and Investments Commission (ASIC) to identify and take down phishing websites and other websites which promote investment scams, to be cost recovered through levies under ASIC’s industry funding model.

• Provide $23.4 million over 3 years from 2023–24 to the Department of the Treasury for a small business cyber wardens program delivered by the Council of Small Business Organisations Australia, to support small businesses to build in-house capability to protect against cyber threats.

• Provide $0.9 million over two years from 2022–23 to develop a 10 Year National Action Plan to support the health and wellbeing of Lesbian, Gay, Bisexual, Transgender, Intersex, Queer and Asexual (LGBTIQA+) people and establish a LGBTIQA+ Health Advisory Group.
  • The Government has noted that the Action Plan will provide a national framework to improve the health outcomes of, and address health disparities, experienced by LGBTIQA+ Australians.

• Subsidise, from 1 July 2023, storage costs of eggs, sperm or embryos for patients with cancer and people at risk of passing on genetic diseases or conditions, for eligible participants who have undergone Medicare Benefits Schedule covered genetic testing.

• Provide $91.1 million over two years from 2023–24 (including $0.2 million in capital) to commence the establishment of the Australian Centre for Disease Control.

• Provide $88.8 million over two years from 2023–24 to support the continued operation of the Consumer Data Right in the banking, energy and non-bank lending sectors, progress the design of action initiation and uplift cyber security.

• Provide $5.0 million over 5 years from 2023–24 to continue a superannuation consumer advocate to improve members’ outcomes, offset by an increase in the Superannuation Supervisory Levy administered by the APRA.

• Provide $89.6 million to the ATO and $1.2 million to Treasury to extend the Personal Income Tax Compliance Program for two years from 1 July 2025 and expand its scope from 1 July 2023.
  • The Government has noted that this extension will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance, and to expand the scope of the program to address emerging areas of risk, such as deductions relating to short-term rental properties to ensure they are genuinely available to rent.

• Extend funding for the Serious Financial Crime Taskforce (SFCT) and Serious Organised Crime program (SOC) over 4 years to 30 June 2027 and merge the programs, with a merged SFCT to commence from 1 July 2023. Funding for both programs currently terminates on 30 June 2023.
  • The SFCT and SOC are currently separately funded ATO-led cross-agency collaborations between the ATO, national policing and other law enforcement and regulatory agencies, targeting serious and organised crime groups and serious financial crime and tax evasion.
  • The Government has noted that an extension and merging of these programs will maximise the disruption of organised crime groups that seek to undermine the integrity of Australia’s public finances.

• Extend the clean building managed investment trust (MIT) withholding tax concession to data centres and warehouses.
  • The Government has noted that this measure will extend eligibility for the concession to data centres and warehouses that meet the relevant energy efficiency standard, where construction commences after 7:30 PM (AEST) on 9 May 2023 (Budget night). This measure will apply from 1 July 2025.

• Provide $8.0 million over 4 years from 2023–24 (and $2.0 million per year ongoing) to establish an Anti-Slavery Commissioner to work across Government, industry and civil society, to support compliance with the Modern Slavery Act 2018, to improve transparency in supply chains and help fight modern slavery in Australia and abroad.

• Provide $8.6 million over 3 years from 2023–24 to the Australian Transaction Reports and Analysis Centre (AUSTRAC) to develop and consult stakeholders on legislative reforms to modernise Australia’s anti-money laundering and counter-terrorism financing regime and support preparation for, and participation in, the evaluation of Australia’s regime against global standards by the Financial Action Task Force.

• Provide $26.9 million in 2023–24 to sustain and develop the next stage of the Digital ID program. Funding includes, for example:
  • $24.7 million for the Department of Finance and the Digital Transformation Agency (DTA) to maintain the current Digital ID system and design the policy and legislative foundations to transition to an economy-wide Digital ID ecosystem with an independent regulator.
  • $1.1 million for the Office of the Australian Information Commissioner to provide ongoing privacy assurance for the Digital ID program.
  • $1.1 million for the ATO for communications research associated with the myGovID brand.

Further information about the October 2022 Federal Budget

To learn more about this latest Budget, you can watch the following:

• ABC News: Key takeaway points from the Budget
• ABC News: Interview with Jim Chalmers

Sources
1 https://ministers.treasury.gov.au/ministers/stephen-jones-2022/media-releases/introducing-payday-super