Australia is struggling under the worst cost of living crisis in a generation. Inflation is sky-high, household debt is spiralling, and rental prices are ratcheting up. Treasurer Jim Chalmers has said that Labor’s first full-year Federal Budget has made tackling the cost of living a key priority.
“The Budget we present to the Australian people tonight provides cost‑of‑living relief that is responsible and affordable and prioritises those most in need,” Chalmers told the House of Representatives on Tuesday night.
A package of almost $15 billion has been put together in cost of living relief policies. Spent over the next four years, the money will go towards bringing down consumer costs on essentials like medications and energy bills. It will also raise the incomes of those doing it toughest, as Chalmers puts it, although is targeted so as to avoid further inflationary pressures.
“People are under the pump. We’ve carefully calibrated and designed this budget so that it takes pressure off the cost of living rather than add to it,” the Treasurer has said.
However, not everyone is thrilled with the government’s measures. The opposition has said that Labor’s policies will drive inflation while simultaneously not spending enough to make a positive impact on people’s lives.
The Greens have also said that Labor is sacrificing Australians in order to deliver their budget surplus. “Under Labor, the Budget’s in surplus but people are living in cars and tents. Every dollar of surplus is a dollar not spent lifting people out of poverty,” Greens Leader Adam Bandt has said.
“This year, Labor’s making more from rising student debt than they are from changes to their gas tax. Millions of people have been left in poverty while big corporations making record profits win big”.
Here’s how the budget aims to tackle the cost of living crisis.
Budget Cost of Living Relief
Healthcare
A headline policy announced at the end of April sees the government halve the cost of hundreds of medications for patients.
A 60-day supply of more than 320 medications on the Pharmaceutical Benefits Scheme will be made available for the price of a 30-day supply.
The first hundred of those medications will become available in September, with another hundred in March next year, and a final hundred in September 2024.
Our Health Minister, Mark Butler, has said this will benefit around six million Australians, saving them roughly $180 per year and the time spent going to the pharmacy to collect their script.
A full list of the medications that will be made cheaper can be found here.
The government is also tripling bulk billing incentives, spending $3.5 billion over five years to make it “easier and cheaper to see a doctor”. More doctors will be incentivised through these increased payments to see bulk-billed patients. However, these changes only apply to children under the age of 16 and Commonwealth concession card holders.
Energy Bill Assistance
Another pre-announced policy is that of energy bill relief.
From July, approximately 5 million households will receive up to $500 in energy bill subsidies while up to 1 million small businesses will get $650 off of their power bills as part of a $3 billion measure, the Treasurer has said.
However, the exact rebates will depend on personal circumstances, including where in the country you live, owing to Australia’s disjointed energy system.
170,000 households will also be eligible for the household energy upgrades fund. This $1.3 billion scheme will offer low-interest loans and fund upgrades to social housing to improve energy efficiency. The aim here is to knock the costs of energy bills down.
Cheaper Childcare
Cheaper childcare was an election promise that Labor passed in November last year. The $55.3 billion package will come into effect from July 10 this year, boosted by $9 billion since Labor took office.
Depending on your income and other factors, the government has said the average family could save around $119 per fortnight on childcare costs.
Childcare subsidy rates will increase for up to 90% of eligible families earning less than a combined household income of $530,000. It is expected to help some 1.2 million families across the country.
To see how much you could save under the new scheme, head to the government’s child care subsidy calculator here.
JobSeeker Changes
In a major announcement, Chalmers announced that the government will be increasing the base rate of JobSeeker, Austudy, and Youth Allowance by $40 per fortnight.
Previously reported changes to JobSeeker include expanding the eligibility for the higher rate of JobSeeker, which currently applies to those over 60 who have been on welfare for more than nine months. That age has now been lowered to the age of 55, giving 52,000 people aged 55-59 a $92.10 boost per fortnight.
These increases will benefit the 1.1 million people currently receiving unemployment benefits.
Rent Assistance Increase
Another huge announcement, that received cheers in the House of Representatives, is the increase of Commonwealth Rent Assistance.
For the first time in three decades, the government will be increasing rest assistance payments by a maximum of 15%.
This should benefit the 1.1 million people currently receiving rent assistance.
Single-Parent Payment
Single parents scored a big boost this time around as those who are reliant on welfare will not be forced back to work until their child is 14, an increase of six years.
The changes could provide 57,000 families with an additional $176.90 per fortnight.
It reverses a Gillard-era change that cut the eligibility of the single-parent payment from 16 to eight.
Housing
When Labor came to power, they promised to build a million new homes over five years to ease the housing crisis. This budget is offering more incentives to build those houses, the government has said.
They plan to do so by reducing the tax burden on newly constructed build-to-rent developments from 30% to 15%.
They will also increase capital work tax deductions from 2.5% to 4%, allowing construction companies to earn more from their projects.
The National Housing Finance and Investment Corporation will also be getting an additional $2 billion to invest in social and affordable housing projects.
Read all of The Latch’s Federal Budget 2023 coverage here.
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