Headlining last night's announcement were personal income tax cuts, extension and modification of existing home-buying schemes, changes to superannuation rules, and an almost $2 billion investment in childcare. 

The word of the evening was "recovery", with the Treasurer stating Australia had been a global leader in its COVID-recovery and forecast this year's budget would consolidate the rebound. 

So what did experts make of Mr Frydenberg's financial plan for the nation?

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Housing affordability measures largely welcomed but debt concerns remain 

The Government announced an extension to the First Home Loan Deposit Scheme (FHLDS), increased and extended the First Home Super Saver Scheme (FHSS), and created the Family Home Guarantee. 

The latter will allow single parent households to buy a property with as little as a 2% deposit. 

Eliza Owen, CoreLogic Head of Research Australia, said the low deposit meant more debt would accrue but the long term benefits would likely outweigh this. 

"Taking on more debt may still be worthwhile if the borrower is otherwise spending tens of thousands of dollars on each year on rent," Ms Owen said.

"Even more beneficial could be the long term gains in real assets that come from accessing ownership earlier with a lower deposit, which could outweigh the additional interest paid." 

Chief economist at Archistar, Dr Andrew Wilson, said the extension of the FHLDS would be welcome news to many, but noted the success of the HomeBuilder scheme may hinder those in metropolitan areas. 

"Although this scheme, building on its previous success, will provide more opportunities for first home buyers, the current boom in new house construction is set to lead to supply constraints and higher building costs, and clearly favours those content with outer-suburban fringe living," Dr Wilson said.

"Nonetheless the big picture is the policy’s clear potential for the ongoing economic stimulus provided by the residential construction industry - and that is still a main game in Australia’s ongoing covid recovery." 

Mission Australia chief executive, James Toomey, acknowledged the policies would help many Australians but said more needed to be done to address housing and homelessness. 

“The grim shortage of social housing and affordable rentals, high levels of housing stress, punitive rate of JobSeeker and other income support payments and a job market topped up with insecure, short term jobs is triggering a spike in financial distress, housing insecurity and homelessness," Mr Toomey said.

“One of the most effective things that our Federal Government can do to ensure people are safely housed and to prevent people becoming homeless is to create the conditions for innovations which will increase the supply of affordable housing options, including social housing." 

Tax cuts more of a "deferral of a tax rise" 

The Low and Middle-Income Tax Offset (LMITO) has been extended for another 12 months to cover the 2021/22 financial year. 

This means when individuals lodge their 2021/22 tax return next year, they'll receive an offset worth up to $1,080. 

But Director of Tax Communications at H&R Block, Mark Chapman, questioned the validity of the Government naming this a tax cut and said workers were unlikely to see any of the cash in their back pocket. 

"This measure ensures that 10.2 million low and middle income Australians will not see a tax hike of up to $1,080 next year. However, let’s call this what it is and ignore the government spin; this isn’t a tax cut, it's simply the deferral of a tax rise," Mr Chapman said.

"Nobody should be counting the extra dollars in next year’s pay packets because there aren’t any; the tax burden for low and middle income individuals next year is exactly the same as it was this year." 

Australian Council of Social Service CEO, Dr Cassandra Goldie, questioned why the Government was giving out tax incentives while seemingly ignoring those experiencing financial hardship. 

"So far the government has given around $20 billion dollars in personal tax cuts to people already in paid jobs for the next financial year, plus tens of billions in business tax incentives," Dr Goldie said.

"But not a single cent more to people living in deep poverty, including women on low incomes." 

Super changes get the green light but questions remain over impact

A slew of changes to superannuation were headlined by the repeal of the work test for 67 to 74 year olds to make non-concessional or salary sacrificed contrbution, removal of the minimum income threshold for super guarantee, and reduction of the downsizer contribution age. 

Ms Owen said the latter policy may free up more established housing, but said any impact was unlikely to be seen prior to its introduction in July 2022. 

"This means motivated downsizers aged 60 to 64 may wait for the scheme to come into effect before selling, and any impact of increased listings as a result would only impact the housing market then," she said.

"It also worth noting that in the almost three years since the scheme was implemented, only around 22,000 individuals have accessed it, so this may not add materially to supply."

Dr Wilson also noted the little success the scheme had, and said it had been impeded by the lack of suitable next-stage downsizer accommodation. 

"The reduced age eligibility will only exacerbate this issue, with the clear shortage of reasonably affordable, medium-density and larger higher-density dwellings in established middle and inner suburbs," he said.

"The availability of appropriate suburban downsizer accommodation likely takes priority over financial incentives, particularly for a younger demographic." 

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