October 2022 Federal Budget
A rather boring, lack lustre budget from Jim Chalmers.
The best way to describe the October 2022 budget handed down by Treasurer Jim Chalmers of the Albanese Labour Government is “meh”. There are lots of issues that I thought would have been addressed in this budget that weren’t but I am also not displeased with the items that were put forward. Nothing to get too excited about but nothing to be too upset about either, so yes, “meh”.
I don’t think that we can be too upset with a boring budget in the current climate. The current Government does have a mammoth task ahead of them to reduce National Debt while managing inflation through an uncertain global environment. Chalmers did allude to the pain that can be expected and I think is trying to soften this blow with some cosmetic measures announced in the budget.
Treasury did announce that they expect inflation relent next year. Dropping from an average 5.75% this year to 3.5% and 2.5% in 2025. Along with this we can expect interest rates to either slow down their incline or plateau in line with inflation in the later half of next year. We can expect cost of living (especially energy) to continue to rise for the next little while — comforting though that Government is not talking about a recession rather a slowing down.
Surprisingly but not surprisingly Government did not announce any changes to the tax regime except for a crackdown on compliance and a spotlight on multinationals. The Tax Office is being gilded to chase those tax avoiders and late tax receipts — this is important to note if your taxation obligations are behind or a little **ahem** unorganised. Chalmers has however dodged any questions about tax reform in the future, deflecting the query to say that a focus on compliance is a start.
This is not surprising because Government would be hard pressed to hit taxpayers pockets right now under the current climate. This also means that the income tax cuts announced by Morrison’s Liberal Government will still go ahead as planned. As a result, approximately 94 per cent of Australians will fall into the 30% or less tax brackets and only three personal income tax rates will apply from 1 July 2024.
The highlights of Chalmer’s budget are as follows
$4.7 billion to deliver cheaper childcare, increasing the current 85% childcare rebate to 90% for families with a combined income of less than $80,000. That subsidy will drop by one per cent for each additional $5,000 of annual income, reaching $0 at $530,000;
$532 million to expand Paid Parental Leave to 26 weeks (currently 18 weeks for the primary care giver and 2 weeks for the other partner) by 2026. The changes will start to increase in July 2024, which will include the couple being able to choose how they split the leave;
A new National Housing Accord to deliver up to 1 million new affordable homes over 5 years;
$787 million to reduce the co-payment under the PBS from $42.50 to $30 per script; and
480,000 free TAFE places and an extra 20,000 university places targeting skills shortages in industries like health, education, engineering and technology.
Nursing homes will increase the care given to residents to 215 minutes per day by October 2024. This comes along with $845 million to help facilities manage the impact of COVID.
$1.7 billion over 6 years has been pledged to women's safety initiatives. This includes $39.6 million in the 2024 FY to meet the demand of the Escaping Violence Payment.
Although small business is often highly regarded in a federal budget this time our community has been forgotten except for a $15 million debt help and counselling hotline