The Oz Budget without the BS: Oct 22

Each year I write a 'Budget without the BS'. It's the highlights of the Federal budget and what it means for YOU but without the political spin or media clickbait.

Let's start with my thoughts on the budget. If I was to describe the budget it would be like this: vanilla. It's not bad, it's not good, you'd probably prefer something else but you're a little like, meh, this will do. It's the beige of budgets. I'm not suggesting that's a bad thing, but it's also not necessarily a good thing, it just is.  The Treasurer has included a few artificial sweeteners, they've hinted at pain to come but they've also let you know that we should be grateful for the vanilla, because the chocolate has run out for us and in some countries, the vanilla will run out soon too.

The good news for the economy as highlighted in the Budget, is that the Treasurer believes that inflation will drop from an average of 5.75% this year to 3.5% and 2.5% in 2025. That should mean a slowing down and halting of interest rates by the second half of next year. This slowing down is necessary (inflation is one of the reasons why we've had a run of interest rates) but it will also mean that cost of living will continue to rise, especially energy which is expected to increase by 56%. It's also why tax cuts have been ruled out for the next couple of years because the government can't risk adding more dollars to your pockets which you might spend and add to inflation. 

To be clear, the talk is of slowing down or softening and not a recession in Australia which is also good news for business owners and households - though possibly not for the media who might need to put that particular clickbait headline to bed. 

With that intro over, what does the budget mean to your bank account? I've split up the spending into different groups so you can see what is relevant and overlook what isn't.

 Families with children 

• Increased child care rebates: One of the centrepieces of the government's budget is it's $4.7 billion spend on childcare over the next 4 years. From 1 July 2023, the subsid will lift from 85% to 90% for families with a combined income of less than $80,000. That subsidy will drop by one per cent for each additional $5000 of annual income, until it ticks down to zero at $530,000. For example a couple with a combined income of $120,000 would receive an 82% subsidy (up from the current 71%).
• Increased & expanded paid parental leave: Currently, paid parental leave is available for 18 weeks for the birth parent, while the partner is eligible for two weeks. By 2026, expanded paid parental leave will increase to 26 weeks of leave. The changes will be scaled from July 2024 and will also allow two parent households to decide how they split the leave.

Home Buying

• National Housing Accord: The government has set a goal of building 1 million new homes over five years from 2024. Under the Accord, state and territory governments will undertake expedited zoning, planning and land release to deliver on a joint improvement to improve the availability of social and affordable housing. At this stage, this also seems like a big win for the building and construction industry and we'll wait and see as to whether it trickles down into a win for cheaper, accessible housing. 

TAFE Students

• 480,000 free places: 480,000 free TAFE places have been promised over 4 years and an extra 20,000 university places promised over two years. These will target skills shortages in areas such as health, education, engineering and technology. 

Climate Change

• Increased climate change spending: The budget contains nearly $25 billion in climate related spending out until 2030.

Aged Care

• Increased care in nursing homes: The average number of minutes that nursing home residents receive care will rise to 215 minutes per resident per day by October 2024. Plus $845 million for aged care facilities to manage the impact of COVID.

Women's Safety

• Increased funding for Women's Safety Initiatives:  $1.7 billion over 6 years will be going towards women's safety initiatives, including $39.6 million in the next financial year to keep up with increased demand for the Escaping Violence Payment. There's also funding for 500 frontline community workers and $100 million for crisis and transitional housing options for women and children fleeing violence, along with older women on low incomes at risk of homelessness

Tax avoiders & NDIS rorters:

• Fraud squad & increased spending: A new fraud squad will crack down on rorting of the National Disability Insurance Scheme while the ATO have been given extra resources to chase down dodgy receipts, overclaims and other accountancy fiddling.

What's missing and who is losing?

• Households: There's no getting round it. Unless you have young children or are in construction, there is very little in this budget for households to help with the rising cost of living. Including the acknowledged 56% increase in energy costs which was referred to in the budget.
• Businesses. The often touted backbone of the economy, small business has been largely ignored in this budget except for a $15 million debt help and counselling hotline.