Labelled by Treasurer Jim Chalmers as a Budget with a five-point plan for responsible and targeted cost-of-living relief, key benefits for savers include cheaper medicine, childcare and the push for more affordable housing.
Highlights include:
- PBS script co-pays brought down from $42.50 to $30 per script.
- Up to 90% of childcare costs subsidised for families earning less than $80,000 per year
- Up to 20,000 extra public housing
- Many electric vehicles exempt from fringe benefits tax and import tariffs
- Increase in free TAFE places
Notable omissions include no direct relief for household electricity and power bills.
The economic outlook
These benefits come off the back of economic uncertainty yet an improved underlying cash balance for 2022-23, growing $41.1 billion compared to the 2022 Pre-election and Economic Fiscal Outlook (PEFO).
The government now forecasts the underlying cash balance for 2022-23 to remain in the red at -$36.9 billion - with revenue expected at $625 billion and expenses at $650.9 billion.
Federal Treasurer Jim Chalmers said in this uncertain environment, Australia has plenty going for it, including low unemployment and good prices for our exports.
“While we intend to avoid the worst of the turbulence from overseas, we cannot escape it completely,” Mr Chalmers said.
“Global challenges, along with high inflation and higher interest rates, will have an impact.
“(However) these policies will support Australians, delivering a long-term economic dividend that does not put additional pressure on inflation.”
@savings.com.au The Federal Budget Wash-Up has begun! 💰 Check out how the budget will impact savers with some key highlights announced by the Labor Government. For this and more wrap ups following the Federal Budget, head to savings.com.au 💸 #federalbudget2022 #federalbudgetaustralia #parliamenthouse #labor #government #budget #money #moneytoks #moneytok #ausfinance #australia #savings #medicine #childcare #housingsupply #propertyinvesting #ausproperty ♬ original sound - Savings.com.au
Cheaper medicines
From 1 January 2023, the government will make medicines cheaper for Australians, decreasing the maximum co-payment under the Pharmaceutical Benefits Scheme (PBS) from $42.50 to $30 per script.
The government will provide $787.1 million over 4 years commencing this financial year to fund cheaper medicines.
This is set to aid 3.6 million Australians in saving more than $190 million each year in out-of-pocket medication costs, based on government figures.
More childcare subsidies
Parents can expect cheaper childcare off the back of Labor’s Budget, with the government investing $4.6 billion to boost Child Care Subsidy rates to make early childhood education more affordable.
From July 2023, Child Care Subsidy rates will lift from 85% to 90% for families earning less than $80,000.
The Treasurer said cheaper childcare is a game-changing investment in families, our workforce, and the economy.
“It will increase the paid hours worked by women with young children by up to 1.4 million hours a week in the first year alone,” he said.
“That’s the equivalent of 37,000 extra full-time workers.”
Boosted housing supply
Highlighted by the introduction of the National Housing Accord, the Budget sets out to build affordable homes to help tackle housing supply woes.
The National Housing Accord will build one million new homes over five years from 2024, off the back of the government providing $350 million in total over the same period.
“Supply hasn’t kept up with demand, which means too many people struggle to live close to where they work,” Mr Chalmers said.
“We want affordable rental properties as many families are struggling to keep up.
“Institutional investors, including superannuation funds, have endorsed the Accord and will work with us to leverage more investment that delivers for their investors and members’ interests, and for the national interest."
Previous housing measures announced by the Labor government in the months prior to the Budget following a successful election victory include the Help to Buy scheme and Regional First Home Buyer Guarantee.
Electric car discounts
The Budget unveils an additional $275 million investment to the government’s ‘Driving the Nation Fund’, designated to help reduce transport emissions.
Key to the reduction of transport emissions is the uptake of electric vehicles, with the government outlining a $345 million Electric Car Discount.
The Electric Car Discount will see taxes cut by exempting electric vehicles from Fringe Benefits Tax and the 5% import tariff applicable to new cars.
Budget papers read that battery, hydrogen fuel cell and plug-in hybrid electric cars will be exempt from fringe benefits tax and import tariffs if they have a retail price below the luxury car tax threshold for fuel-efficient cars.
Further, the eligible electric vehicle must not have been held or used before 1 July 2022.
The current fuel-efficient luxury car tax threshold is $84,916.
See Also: Top Five Cheapest Electric Vehicles in Australia
Electricity savings - just not right away
Forming part of the government’s ‘Powering Australia Plan’, the Rewiring the Nation project will provide $20 billion to upgrade to Australia’s electricity grid by building interconnectors and linking renewable energy zones in a bid to deliver cleaner, cheaper, energy for Aussie households.
Further, the government is providing $224.3 million to deploy 400 community solar batteries across Australia to lower bills, cut emissions and reduce pressure on the electricity grid.
These batteries would allow Aussie households to store excess solar energy in their community, supporting families that are unable to install rooftop solar, such as apartment owners and renters.
More free TAFE courses
The government unveiled 480,000 fee-free TAFE and community-based vocational education places as part of the Budget, to ensure Aussies have access to the skills needed for future jobs.
Fee-free places will be targeted to priority groups including First Nations people, young people, job seekers, unpaid carers, women in non-traditional fields of study and people with disability.
Further, the government alongside all states and territories have committed to develop a $1 billion one-year National Skills Agreement.
The agreement will commence on 1 January 2023 and deliver 180,000 fee-free TAFE and community-based vocational education places over 12 months.
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Image by Jim Chalmers via Facebook
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