Treasurer Jim Chalmers has delivered Labor’s first Federal Budget in a decade tonight. It outlines the government’s intentions for raising revenue (from taxes) and how it plans to spend that money for the remainder of the financial year, as well as its broader vision for the future.
He said right from the outset it would be a conservative and “responsible” budget, meaning they wouldn’t actually be spending much given the state of the world and our economy.
So what does this mean for young Australians? Here’s what we learnt.
Our economy’s in rough shape
In his speech, Chalmers made it clear the economy is in a pretty precarious position so the government has prepared “a responsible budget that is right for the times” (read: lacklustre).
With inflation forecast to reach 7.75 per cent by the end of the year, housing and rental affordability in crisis, the cost of living through the roof, a recession looming and more natural disasters predicted for summer, it looks like everything’s only going to get more expensive in coming months.
So Chalmers said the government needs to rein in its spending, save for more rainy days ahead and make sure its debt deficit is lower than under the last government — which is a point of pride for Labor.
Australia’s in a fair amount of debt and it’s forecast to get worse in the next two financial years. But it’s not as bad as the government previously thought it was going to be because a) the world’s paying shitloads for our precious natural resources (like coal) rn and b) unemployment is extremely low so therefore more people are paying income tax.
Nevertheless, things aren’t looking great and the government is basically telling us to tighten our belts and be … strong?
“Australians have demonstrated the best of our national character: resolute and resilient in hard times, practical and pragmatic about the challenges we confront, optimistic and confident in a better future,” Chalmers said in his budget speech.
The cost of living isn’t going to improve anytime soon
The government has announced a $7.5 billion cost of living relief package, but we’re sad to say young people aren’t really the target audience.
The package delivers on five key policies: cheaper and more accessible child care, expanded parental leave, cheaper medicines, more affordable housing and wage increases which Chalmers said would “boost productivity, grow the economy and put some money back in people’s pockets”.
The government has committed $4.7 billion to make childcare cheaper and help more parents work. Yay.
As announced earlier this month, paid parental leave will soon increase to six months or 26 weeks up from 18 weeks, costing the government $531.6m . And it’s flexible, so parents can choose how to split it.
Prescription medicines on the Pharmaceutical Benefits Scheme will be reduced by $12.50 to $30, which will cost the government $787.1 million — an election promise fulfilled.
Chalmers also mentioned a plan to “get wages moving again”, but there’s no actual commitments or money allocated to raising wages this financial year.
And unfortunately with inflation still yet to peak, workers’ pay is expected to continue to literally go backwards until at least mid-2024. Yes that’s right, we’re all effectively losing money because wages compared to inflation is very bad. We explain that here.
What’s actually new today is the target of building one million new affordable homes over five years from 2024 to hopefully help housing affordability go down across the board.
But this $7.5 billion package is kind of nonsense when you sit it next to the extremely controversial $243 billion stage three tax cuts that will only benefit Australia’s richest people. The government has confirmed it would implement the cuts, initially introduced by the Coalition government, in 2024.
Young people still won’t be able to buy homes — not now, not ever
Rising interest rates have seen house prices dip a little since the last budget in May but in that time the rental affordability crisis has descended into a full-on catastrophe. Rental vacancy rates have broken new record lows for four consecutive months and prices are out of control.
So the government has set a goal of building a million new homes, starting two years from now.
But while one million homes in five years sounds ambitious, the ABC has reported that is pretty much the rate we’re literally already at. 985,085 dwellings were completed in the five years to March 2022. So fuck.
It’s time to do a TAFE course
Chalmers flagged the government would invest $1 billion in fee-free TAFE and vocational education.
“In 2012 more than 57,000 Australians completed a trade apprenticeship, by 2021 that number had dropped by more than 20,000,” he said.
“So tonight we find a better future for vocational education.”
180,000 places will be created next year and 480,000 fee-free TAFE and vocational educational places will come in the next four years. Noice.
TAFE facilities in Aus will also get a tidy $50 million over the next two years to modernise their facilities.
Over on the uni end of things, the government committed to $485 million on 20,000 university places for students from disadvantaged backgrounds.
As for the wee kids and teens, the government has announced a $203.7 million Student Wellbeing boost where, on average, schools will cop $20,000 to use for student mental health and wellbeing initiatives, facilities or care. Alas, it doesn’t look like they’ll be using it to cancel maths.
Then there’s the Schools Upgrade Fund — $270.8 million to support improving ventilation and air quality, plus larger refurbishments for public schools.
Finally, the government is extending the High Achieving Teachers program and providing bursaries of up to $40,000 to help address the teacher shortage.
In a nice little environmental and education overlap, the government committed more than $100 million to the New Energy Apprenticeships and New Energy Skills programs. Those will include developing a new mentoring program plus up to $10,000 per apprentice in a clean energy role.
In the wake of all these natural disasters, there’ll be more disaster relief
We can expect continued disaster relief given the devastating floods across Australia this month. Chalmers spoke at length about the subject in his budget speech.
“As we are finalising this budget, floods were once again tragically taking lives, wrecking homes, shutting businesses, disrupting livelihoods and pushing up the cost of living,” he said.
“We are once again reminded of the solidarity that living on this harsh land demands of our people and of our communities.”
He also said the government “acted quickly” to ensure disaster assistance payments were available.
The government said $3 billion had been provisioned in response to the recent flooding that’ll go towards both payments to affected individuals and support to the states to help relieve communities and businesses.
It’ll also fund Disaster Relief Australia to “deploy more than 5000 extra volunteers when future disasters strike”. That investment comes to $38.3 million.
Chalmers also flagged that the budget would invest up $200 million a year on projects like sea walls, flood levees, cyclone shelters, fire breaks and evacuation centres.
More money for the environment (yay)
We have quite a few updates when it comes to the ‘ol environment.
First up: a $42.6 million investment in restoring the Climate Change Authority, plus an Annual Climate Change Statement to Parliament. The government also wants to increase transparency re: climate spending in the budget.
The government committed $105.2 million to support First Nations people in responding to climate change, including through a Torres Strait Climate Change Centre of Excellence and a First Nations Clean Energy Strategy and Community Micrograms Program.
There’s also a nice $1.8 billion investment to “protect, restore and manage the natural environment”.
Environment spending includes $66 million to expand an Indigenous Protection Areas program, around $600 million to protect threatened species over the next five years and $90 million spent on training approximately 1000 Landcare rangers.
The government will also restore funding to the Environmental Defenders Office and Environmental Justice Australia. It’s giving Captain Planet.
Plus, the government itself will invest $7.1 million to get its carbon emissions to net zero by 2030.
There’s some tidy commitments to the Great Barrier Reef too — it’s set to spend $1.2 billion on the reef by 2030, which is a $200 million increase on the Morrison government’s commitment.
Finally, the government’s committing a decent bit of cash to clean and renewable energy.
“After nearly 10 frustrating years and more than 20 failed energy policies, Australia now has a government that understands the generational and economic imperative of acting on climate change,” Chalmers said.
It’ll spend $20 billion on “low-cost finance” to upgrade the electricity grid as part of the Rewiring the Nation Plan, and establish a $1.9 billion Powering the Regions Fund. The goal? To decarbonise regional Australia and help regional Aussies “access the economic opportunities” of that process.
This budget implements Labor’s Powering Australia Plan, which will see an investment of more than $800 million across a bunch of different initiatives.
That includes stuff like $102 million spent on community solar banks and $224 million on community batteries.
$500 million will also be spent on reducing transport emissions — electric vehicle fans, let’s go. As Charli XCX said, vroom vroom.
So all in all, a pretty boring budget.