Quick Federal Budget Summary for 2022-2023
The 2022-23 Federal Budget has a number of highlights relevant to many of our clients, friends, and supporters explored further below.
Overall, a reasonable budget in terms of what was required, but an uninspiring one with the forward period in mind.
Key forecasts
- Budget deficits will continue through to 2032-33, but the government doesn’t expect them to exceed more than 2% of GDP from 2024-25.
- RBA cash rate to peak at 3.35% in 1st half of 2023 (currently at 2.60%)
- Annual interest payments on government debt expected to hit $70.5 billion in the next decade, about $30.5 billion higher than forecast just 7 months ago
- Deficit to remain about $50 billion over the next decade, roughly 2% of GDP, with big cuts needed to bring the deficit in
- Gross debt to continue rising out to 2025-26 to $1.16 trillion or 43% of GDP, whilst net debt rises to $767 billion or 29% of GDP
Key statements
- Inflation to average 5.75% this financial year and 3.5% next year, before dropping back to 2.5% in 2024-25
- Unemployment to rise to 4.5% over the next 2 years
- National Disability Insurance Scheme (NDIS) could hit $102 billion by June 2023 which would see it eclipse the age pension
- Electricity costs to rise by 20% this year and another 30% next year, whilst gas costs are to rise 20% this year and another 20% next year
- Wages to grow at the fastest pace in more than decade at 4%, but workers to still be worse off with inflation running hotter wages growth
Winners
- Families – progress on $4.7 billion plan to reduce the cost of childcare for families from July 2023
- Patients - $2.9 billion package to strengthen primary care
- Aged care residents - $2.5 billion to mandate a minimum number of care minutes for nursing home residents and employing a registered nurse onsite 24/7 in homes.
- Internet - $2.4 billion to be spent on NBN to expand full fibre access to 1.5 million homes and businesses by 2025
- Foreign Aid - $2 billion boost in aid and grants for the Pacific and SE Asia.
- Students - $852 million to provide 480,000 fee-free TAFE places
- Medicine users – Max co-payment on prescription drugs drops to $30 a script from January at a cost of $787 million
- New parents – $530 million for paid parental leave payments up to 26 weeks by 2026
- Self-funded retirees – income thresholds increased to $90,000 for singles and $144,000 for couples so more people qualify for the senior’s health card.
- Skilled migrants – permanent migration program expanded to 195,000 places a year
Losers
- Business Incentives - Scrapping previous grants – including infrastructure, business incentives, community programs, road and commuter car parks, etc, saving $13.7 billion
- Energy users – electricity costs to rise by 20% this year and another 30% next year, whilst gas costs are to rise 20% this year and another 20% next year
- Consumers – weather related events on east coast to add to food inflation over the next few quarters
More details can be found at the Governments official Budget website here.
