What Will the Australian Federal Budget Look Like? Here’s Everything We Know So Far

australian federal budget 2022

Budget day is here. Normally held in May, the annual Federal Budget has this year been pulled forward to March 29 to make way for the upcoming Federal Election which we expect to happen May 21.

Treasurer Josh Frydenberg has said that he aims to repair some of the debt accumulated during the COVID-19 pandemic with his 2022-2023 budget, without resorting to deep cuts that could impact economic recovery.

The last time a budget was held early was in 2019, right before the announcement of that year’s election, so expect to hear news of that shortly after. The budget announcement is thought to be a final hope for the Coalition, who have been left rattled after a 7% swing towards Labor in the South Australian state election over the weekend. That election, the first in which a leader presiding over the pandemic has been put to the electoral test, saw one-term Liberal Premier Steven Marshall step aside for SA Labor leader Peter Malinauskas.

Because of this, you may expect that the budget will be full of all sorts of economic bonuses to sweeten the electorate, however, Frydenberg appears to be wanting to tread a fine line. He’s navigating between COVID recovery spending and the fiscally conservative members of his party who are concerned about the $863 billion COVID debt the country has been saddled with over the past two years.

In spite of this, economic signs do look good. The budget deficit is estimated to be around $70 billion, instead of the near $100 billion it was expected to be in December. Unemployment is also low, at 4%, meaning the government won’t need to spend as much on unemployment support. The price of commodities, like iron ore and coal, which Australia sells a lot of, is also high due to global instability, meaning we’re in a strong economic position that the government are going to want to sure up.

This means we may see less blatant economic incentives to vote Liberal, however, we do know already that cash payments of between $200 and $400 are expected to be given to millions of Australians before the election to help with the rising cost of living.

Here’s everything that you can expect to see in the upcoming Australian Federal Budget 2022-2023.

Cost of Living

The cost of everything from petrol to groceries has been soaring lately and this is something Frydenberg has already said he is keen to address.

This means we could see a temporary cut to fuel tax as well as an extension of the low-and-middle-income tax offset of $1080 for another year.

Childcare subsidies are likely to be brought forward as well while planned tax cuts for those earning up to $200,000 are likely to remain incoming in 2024 and not be brought forward.

Since mid-March, there have been also been reports the government is considering one-off payments to be made to Australians as a way to soften the impact of the rising cost of living. The bonus is believed to be going to all Australians earning under $120,000 a year, pensioners included. This will make up a combined total of approximately 15 million people.

The Environment

The climate crisis is going to be one of the biggest issues for voters going to the polls in May, however, the budget predictions contain little to address Australia’s growing climate issues.

It’s expected that $800 million will be spent over 10 years to increase Australia’s strategic and scientific capabilities in Antarctica. This is something that has been announced previously and does seek to expand climate research, however, it’s mainly to fend off Chinese activity in the region.

An extra $1 billion will be spent over nine years to protect the Great Barrier Reef, something of a sore issue for a government that successfully saw off attempts to classify it as endangered.

$50 million will be spent over four years to ensure the long-term protection of koalas, again something that Liberals, in particular those in NSW, have taken a beating overdue to land clearing grants.

The Tasmanian forestry industry will receive $86 million to establish new plantations to meet the future demand for wood. Wood was one commodity that Australia ran short of during the pandemic.

While much of this is somewhat in good faith, albeit, mostly hole-patching, the government is also going to spend $130 million to cut ‘green tape’ and fast-track major development projects. Conservation groups have expressed alarm at what they see as a focus on greater resource extraction rather than environmental protection.

National Security and Defence

Defence has been a keystone issue for the Coalition government, who seek to portray themselves as ardent military defenders of Australia and its foreign interests, particularly against the somewhat over-inflated issue of Chinese encroachment into these areas.

As such, budget announcements already made include $38 billion over the next 18 years to recruit 18,500 new soldiers. This is Australia’s biggest military expansion in decades.

$10 billion will be spent on an east coast submarine base in either NSW or QLD to house the AUKUS nuclear submarines we lied to the French about.

$282 million will be spent on defence projects in the Northern Territory which will include warship building facilities and upgrades to existing infrastructure.

$105 million will be spent to support the war in Ukraine, with $70 million going on lethal aid and $35 million on humanitarian assistance.

Overall, spending on defence is expected to reach 2.1% of GDP in this budget.

Mental and Physical Health

The mental health crisis in Australia is an ongoing and real threat affecting each and everyone of us. The Federal Government has attempted to curb some of the largely pandemic-induced issues by offering increased funding to mental health services in the previous budget and this year looks to be similar.

$383 million will be spent over five years on mental health and suicide prevention and support services in NSW. $128 million will be spent on similar in SA over the same period.

$189 million will be spent on strengthening prevention and early intervention efforts in family, domestic, and sexual violence areas over five years.

In this regard, $104 million will also be spent to try and prevent abusers and perpetrators from using technology to track and facilitate abuse.

$315 million over four years will be spent on expanding the national ice drug action strategy. This means more support for families and communities as well as investments in treatment and the workforce that deliver it however it also means targeted funding to law enforcement and prevention strategies.

Aboriginal and Community Controlled Health Services will also see an increase in government funding over a four-year basis that includes an annual increase in finances from July of next year.

The government has also committed to spending $61.2 million to research and develop drugs to treat people with advanced cancer through the Australian Genomic Cancer Medical Centre.

Other Stuff

The usually drier business of maintenance is also will of course continue in this budget, with an approximate $6 billion to be spent on things like sealing outback roads, building dams, and refreshing urban areas in Perth and Brisbane.

The government is also increasing funding to independent schools by $6.4 billion while upping their support for Indigenous boarding students.

The minerals and mining industry will get a $200 million accelerator programme, plus $50 million to support research and development in the industry.

Deregulation of Australian safety standards is a somewhat questionable one, which the government has said will save businesses $136 million each year by relying on international safety standards instead.

Overall, the budget will aim to drive the economy through investments in the manufacturing sector and the digital economy while remaining relatively low-touch so as not to rock the boat further after the past few years we’ve had.

What Time Is the Budget Announcement?

The budget will be announced by Treasurer Josh Frydenberg tonight at 7:30pm AEST time. That’s 7:30 pm for QLD, NSW, ACT, TAS, and VIC; 7:00pm for the NT and SA; and 5.00pm for WA.

The budget will be televised live on ABC and most major news channels. You can also watch the budget speech live on the parliament website.

The Latch will be covering all the exciting developments on March 29 so check back here for updates on the night.

Read all of our budget coverage, here.

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