At 7:30pm tonight, Jim Chalmers delivered his second budget announcing that “the budget provides cost of living relief that is responsible, affordable, and prioritises those most in need.”

The Treasurer said that the Government seeks to strike a considered methodological balance between spending restraint, to keep pressure off inflation, while doing what they can to help people struggling to make ends meet.

Key Forecasts

• $4.2B surplus for 2022-23, $13.9B deficit for 2023-24, $35.1B deficit for 2024-25, $36.6B deficit for 2025-26 and $28.5B deficit for 2026-27;
• 3.25% GDP growth for 2022-23, 1.5% GDP growth for 2023-24, 2.25% GDP growth for 2024-25, 2.75% GDP growth for 2025-26, 2.75% GDP growth for 2026-27;
• Forecast inflation for 2022-23 is 6%, 3.25% for 2023-24, 2.75% for 2024-25, 2.5% for 2025-26 and 2026-27;
• $548.6B net debt for 2022-23, $574.9B net debt for 2023-24, $620.6B net debt for 2024-25, $665.2B net debt for 2025-26, and $702.9B net debt for 2026-27;
• 3.5% unemployment is expected for 2022-23, 4.25% for 2023-24, 4.5% for 2024-25, 4.5% for 2025-26, and 4.25% for 2026-27;
• 3.75% wages growth is expected for 2022-23, 4% for 2023-24, 3.25% for 2024-25, 3.25% for 2025-26, and 3.5% for 2026-27.

Key Announcements

This budget focuses around reducing cost of living and alleviating inflationary pressures and the Treasurer announced the following to achieve these objectives:

• From 1 July 2023, small businesses with annual turnover of $10m or less will be able to claim an instant asset write off deduction on the purchase of business assets costing up to $20,000;
• From 1 July 2023, the Government is introducing the “Small Business Energy Incentive”. This is a new tax break, which will apply from 1 July 2023 to 30 June 2024 and will provide a bonus 20% tax deduction for eligible assets supporting electrification and more efficient energy use. This incentive is available for businesses who turnover less than $50m per year and the annual incentive is capped at $20,000 per business;
• From 1 July 2026, employers will be required to pay their employees’ superannuation at the same time they pay their wages;
• From 1 July 2023, eligible households and small businesses will receive electricity bill relief of up to $500;
• The bulk billing incentive for the most common GP consultations will be tripled for children under the age of 16, pensioners, and Commonwealth concession card holders;
• From 1 September 2023, some patients will be able to get 2 months’ worth of medicine they need for a stable, chronic health condition, which will reduce the number of visits to a pharmacy and GP each year. This is on top of the 1 January 2023 decrease in the maximum co-payment for prescription medication from $42.50 to $30;
• From 1 September 2023, eligible single parents receiving the Parenting Payment will receive the payment until their youngest child turns 14 (currently up to 8 years old);
• From 1 July 2023, families with a household income of less than $530,000 per year will receive a higher child care subsidy rate. Families earning less than $80,000 per year, will receive the maximum 90% subsidy;
• From 1 July 2024, the Australian paid parental leave scheme will be extended by 2 weeks per year until it reaches 26 weeks or 6 months in July 2026. Also, couples will be assessed on a combined income of up to $350,000 to be eligible for paid parental leave;
• The previous Government’s stage 3 tax cuts have not been changed or abolished in this budget and will continue to apply from 1 July 2024. These tax cuts remove the 37% tax bracket, reduce the 32.5% tax rate to 30%, and increase the income threshold for the 45% tax bracket from $180,000 to $200,000.