The Albanese government has unveiled its first budget. So, How does the new budget affect you?
Australians earning between $45,000 and $200,000
Debate over the contentious stage three tax cuts package dominated headlines earlier in October after speculation arose over whether they would be scrapped or pared back. But the policy has been spared the chopping block in this budget, as foreshadowed by the treasurer. Labor had ruled out making any changes to the policy, at least for now.
Labor vowed before the federal election to keep the third tranche of taxation changes, which include cuts which mean anyone earning between $45,000 and $200,000 will pay no more than 30 cents of every dollar they earn in tax. The latest Treasury costing of the policy revealed it had blown out by $11bn – from $243bn to $254bn – over a decade.
Australians over 55
The government will allow more people to make downsizer contributions to their superannuation by reducing the minimum eligibility age from 60 to 55 years of age. The downsizer contribution allows people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home.
New parents
Australians who have young children – or are planning to – are the big winners in this budget. The government is investing $4.7 billion over four years to make childcare cheaper.
Essentially, from July 2023 families who earn a household income of less than $530,000 will see their child care subsidy rate increase.
Families who earn less than $80,000 will see their total child care subsidy rate lift from 85 per cent to 90 per cent.
Expecting or planning to have a child? Then it’s great news for you too. For those expecting, Australia’s paid parental leave scheme will increase to 26 weeks or six months by July 2026.
Currently the paid parental leave scheme offers 18 weeks paid at the minimum wage and an additional two weeks of flexible paid leave.
New homebuyers
Australians looking to purchase their first property will likely have more options available within their budget as part of a landmark national agreement known as the Housing Accord.
Under the agreement, all levels of government along with institutional investors plan to build one million new affordable homes over five years from 2024.
The new homes aim to tackle the supply side of Australia’s current unaffordability crisis, which has seen sky-high demand over a dwindling number of properties.
The government believes the accord will help also reduce rents, which are also soaring to new highs as the national vacancy rate hits a record low.
Disaster response
The government will provide $51.5m in this financial year to support Australians hit by natural disasters including this year’s floods and the ongoing recovery from the 2019-20 Black Summer bushfires.
Australians who need a prescription on the PBS
Any Australian who needs a script filled with a medicine available on the Pharmaceutical Benefits Scheme (PBS) will be better off when the maximum co-payment drops from $42.50 to $30 per script.
This change will take place from January 1, 2023, and will save around $3.6 million Australians a combined $190 million in out-of-pocket costs.
University students
Students studying TAFE courses aren’t the only ones who may get a free spot – the government is also investing $48.5 million to provide up to 20,000 additional university places to tackle areas where there are particular skills shortages.
These include degrees that target areas such as education, health, engineering and technology.
Places will be allocated to people from low socio-economic backgrounds, rural and remote areas, First Nations people, those who are first-in-family to attend university and people with disability.
Aged care workers
Workers in Australia’s vulnerable aged care sector could be on the verge of a pay rise, after the government supported a cash boost for staff in its submission to the Fair Work Commission.
A decision on whether that pay rise is granted will be made in the coming months.
General practitioners
GPs and rural generalists with advanced clinical skills will be offered incentive payments of up to $10,500 to practice medicine in rural and remote communities.
Women
Women will be the beneficiary of a number of initiatives designed to tackle Australia’s gender pay gap, currently sitting just above 14 per cent.
Changes to the Fair Work Act will make it easier for women in low-paid sectors to make pay claims, while the budget is spending $20.2 million over four years to set up two new expert panels focusing on pay equity.
