Federal Budget | 2022

The Hon Dr. Jim Chalmers MP, Treasurer of Australia delivered the Budget for 2022/23 on Oct 25th, 2022. The Budget statement described the global economic environment as “sharply deteriorated”. Australia’s major trade partners face challenges of high inflation, supply chain disruptions, rising energy costs, and risk going into a recession. The budget strategy and outlook document referred to this budget as the best response to global conditions and as one that is “responsible, sensible and suited to the times we are in”. Dr.?Chalmers described the budget as one that is “suited to the conditions” and “where we pay for what’s important and delivering on our commitments”.

This budget is focused on investments and reforms in?health care, aged care, education, housing infrastructure and response to climate change.

"But while we intend to avoid the worst of the turbulence from overseas, we cannot escape it completely.

Global challenges, along with high inflation and higher interest rates, will have an impact." - Dr Jim Chalmers

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Key takeaways:

Aged Care:

• ?The government will mandate the number of care minutes residents receive – starting with 200 care minutes including 40 nursing minutes from 1 October 2023, and 215 care minutes including 44 nursing minutes from 1 October 2024.?From July, all aged-care homes must have a registered nurse on-site 24/7.
• The government will also spend $69.6 million over four years to increase the income threshold for the Commonwealth Seniors Health Card from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.
• A new independent statutory watchdog role – called the Inspector-General of Aged Care – will be set up to investigate systemic issues. A dedicated Aged Care Complaints Commissioner will be responsible to resolve all complaints in this sector.

EV:

• The government will invest in electric vehicle charging infrastructure at 117 highway sites and hydrogen highways for key freight routes. The Government has also committed to ensuring 75% of its fleet purchases and leases are EVs by 2025.
• The intent here is to encourage EV adoption and create a second-hand market for electric vehicles. The $345 million Electric Car Discount will exempt eligible electric cars from fringe benefits tax (FBT) and the 5 percent import tariff.
• For an electric car valued at about $50,000, the FBT exemption would save an employer up to $9,000 a year or, for an individual using a salary sacrifice arrangement, their saving would be up to $4,700 a year. Removing customs duties will also help the purchaser save up to an additional $2,500 if the car was previously subject to an import tariff.

Health Care:

• The Government has committed to invest $158.2 million to hire 380 permanent staff for the National Disability Insurance Agency.
• To improve access to health care in regional areas, the government will invest $143.3 million over four years. A total of $229.8 million will be provided in grants to general practitioners to help them invest in staff training, equipment and improve digital healthcare capabilities.

Education:

• The government will fund 480,000 fee-free TAFE and vocational education places in industries and regions facing skills shortages and 20,000 additional university places for disadvantaged Australians.

Families:

• Families earning less than $80,000 annually are expected to benefit from the Government's decision to lift the maximum childcare subsidy rate from 85 percent to 90 percent.
• The Government will extend the paid parental leave scheme from 18 to 26 weeks and spend $32.1 million over four years on programs to improve mental health, pregnancy, and post-natal support for new and expecting parents.

Migration:

• The government will increase the number of permanent migration visas from 160,000 to 195,000 from next year to ease workforce shortages. More than 90 percent of new places will be for skilled migrants, and more than a quarter targeted to regional areas.

The Budget papers describe the Australian economy as one that faces serious challenges due to high inflation, global economic slowdown, rising interest rates and falling real wages.?Household consumption is expected to slow considerably as pressure?on household budgets begin to mount.??Price rise in the cost of essentials and energy, is expected to create pressures for families in the lower income groups.

written by Shrinivas G - Brand & Marketing Lead - Eziway Group

Notes:

Treasurer's speech to the parliament: https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/speeches/budget-speech-2022-23

Budget Strategy and Outlook:?https://budget.gov.au/2022-23-october/content/bp1/download/bp1_2022-23.pdf

Budget Measures:?https://budget.gov.au/2022-23-october/content/bp2/download/bp2_2022-23.pdf

Building a better future for Australia:?https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/building-better-future-australia