The second “pandemic” budget was delivered by Australia’s Treasurer Josh Frydenberg on Tuesday. “Australia is coming back,” he said. “The Australian spirit has shone through.”
Showcasing the Australian economy, he said the deficit for 2021-22 will be at $106.6 billion – $53 billion lower than forecast in the last budget in October 2020. “Unemployment is at 5.6 per cent, lower than when the Coalition came into government,” he said.
“The COVID-19 recession will see our deficit reach $161bn this year, falling to $57bn in 2024-25. With more Australians back at work, this year’s deficit is $52.7bn lower than was expected just over six months ago in last year’s budget. Net debt will increase to $617.5bn or 30 per cent of GDP this year and peak at $980.6bn or 40.9 per cent of GDP in June 2025.”
He added that “we are better placed than nearly any other country to meet the economic challenges that lie ahead” before proceeding to outline the country’s budget which showed increased spending on aged care, infrastructure and childcare as well as show a sensitivity to women’s issues:
- The low- and middle-income tax offset will be rolled over to benefit 10 million people who earn up to $90,000 a year (but won’t go beyond 2021-2022)
- There will be $30 billion tax breaks for businesses and workers, which will be extensions of current programmes (eg instant asset write-offs).
- A stimulus measure to support recovery includes $1,080 for low-and-middle income earners who are single and $2,160 for couples, meaning more money in people’s pockets to spend across the economy.
- Tax relief is being offered to around 1,000 small brewers and distillers.
Mr Frydenberg said “eight out of 10 jobs are in the private sector”, adding that “a sustainable recovery requires a strong private sector”. He also added that “small and family businesses are the engine room of our economy”. He said, “They are the heart of every local economy.”
- “Over 99 per cent of businesses, employing over 11 million workers, can write off the full value of any eligible asset they purchase,” Mr Frydenberg said, while announcing the extension of these measures for a further year until 30 June 2023 “so a tradie can buy a new ute, a farmer a new harvester and a manufacturer expand their production line.”
- An extension of the small business loan scheme was announced, with Mr Frydenberg stating it has “already helped more than 45,000 businesses access low-cost finance”.
- The creation of an “independent umpire” to stand between small businesses and the ATO win debt recovery actions. “We will take these disputes out of the courts and let small business get on with what they do best.”
Employment and Training
Understanding the “need to equip Australians with the skills they need to get a job today and tomorrow”, Mr Frydenberg made some commitments:
- The government will double its commitment to the JobTrainer Fund to support a total of more than 450,000 new training places to upskill job seekers and young people.
- $2.7 billion to create more than 170,000 new apprenticeships and traineeships to build on the 100,000 new apprenticeships created in the first stage of the programme.
- Training support for women to break into non-traditional trades with 5,000 places.
- An additional 2,700 places in Indigenous girls’ academies to help them finish school to enter the workforce.
- More Stem scholarships for women in partnership with industry.
- An additional 5,000 places in higher education short courses.
- An investment will be made into modernising employment services, including specialist assistance for young and Indigenous Australians.
- “Importantly, for those who find themselves without work, the government has strengthened the safety net, increasing the JobSeeker payment while enhancing mutual obligations.”
Many have called this year’s budget as a “women’s budget”. After the prime minister was exposed to harm following the mishandling of Brittany Higgins and Christian Porter issues, the budget has a strong focus on women. Mr Frydenberg said “one in four women experience violence from a current or former partner” and said “this must stop”.
- A further $1.1 billion on women’s safety for emergency accommodation ($12.6 million), legal assistance, counselling, financial support and emergency assistance. There will be funding worth 164.8 million over three years to create Escaping Violence Payments (providing $1500 in immediate cash and $3,500 in kind of goods or direct payments of bonds, school fees etc), and $354 million for women’s health programs.
- The government wishes to strengthen laws to prevent harrassment.
- An extra $340 million for programs combatting violence against women, and $354 million for women’s health programs.
Mr Frydenberg said “childcare is an important driver of higher workforce participation and women’s economic security” before outlining additional investments to the sector “giving more parents, especially women, the choice to take on extra work,” he said.
- The budget benchmarks $1.6 billion over four years for preschool funding, with Mr Frydenberg mentioning $2 bn (slightly longer period) for preschool services but with the conditions to be negotiated with states and territories.
- A targetted “1.7 billion investment in childcare” will “increase the affordability of childcare for “low- and middle-income families. 250,000 families will be better off by an average of $2,200 each year.”
- The government will “support continued universal access to at least 15 hours of preschool each week (600 hrs per year) for children in the year before they start school”.
Mr Frydenberg said “we have already doubled school funding since we came to office” and said the government is investing record funding in education” with a focus on lifting student outcomes and better equipping teachers.
- More than $19 billion in funding is being offered for universities in 2021-2022, he said, adding that “this year there are 30,000 more places at Australian universities”.
Retirees and aged care
Following the Royal Commission into Aged Care, there was a negative portrayal of the country’s offerings with “shocking cases of neglected and abuse”. The government has accepted all but six of the 148 recommendations of the Royal Commission and further consideration will be offered to the recommendation for mandatory minimum qualification requirements for personal care workers though there is no adoption of the recommendation for civil penalties or recommendations in cases where there is a breach of duty. Calls for a levy to fund the sector have also been rejected.
- Mr Frydenberg announced $17.7 bn in “targetted and practical new funding to significantly improve the system” in an effort to clear the home care waiting list over the next two years. This will mandate a minimum care time in residential aged care homes and increase the workforce.
- There will be an additional 80,000 home care packages to the 275,000 already available.
- An additional payment of $10 per resident per day to enhance the viability and sustainability of the residential aged care sector.
- Over 33,000 new training places for personal carers, and a new Indigenous workforce and retention bonuses to keep more nurses in aged care as well as respite services for carers.
- A strengthening of the regulatory regime to monitor and enforce standards of care.
- Upgrading essential aged care infrastructiure in regional and remote areas.
- Bringing record investment in aged care to over $119bn over the next four years.
- Statistics show that women retire with less superannuation than men, so “tonight, the government will remove the current $450 per month minimum income threshold for the superannuation guarantee” in order to “improve economic security in retirement for around 200,000 women”.
- Improved flexibility by no longer requiring older Australians to meet a work test before they can make voluntary contributions to superannuation.
- Those aged over 60 will be allowed to contribute up to $300,000 into their superannuation “if they downsize their home, freeing up more housing stock for younger families.”
- The Pension Loan Scheme will be enhanced with “immediate access to lump sums of around $12,000 for singles and $18,000 for couples”.
- The government has committed $20 billion to the vaccine rollout and to strengthen the health system in response to COVID-19. There have already been 2.5 million doses offered to Australians, and the budget allocates an additional $1.9 billion for the roll out of vaccines.
- An additional $1.5 billion has been allocated for COVID-related health services, including for testing and tracing, respiratory clinics and telehealth.
Mr Frydenberg said that the Morrison government has listed more than 2,600 medicines on the PBS since coming to government in order to put “life-changing treatments within the reach of every Australian”. To expand on this:
- New medicines are being funded to treat breast cancer, lung cancer, severe osteoporosis and asthma. Emgality to treat chronic migraines will be listed so that instead of costing $6,800 per year for treatment it will now cost $41.30 a script or $6.60 for concession card holders.
- New funding for endometriosis, research into pre-term birth and genetic testing for pregnant women.
- Higher incentives to rural and regional GPs for bulk-billed services.
- A further $13.2 bn over four years to meet the needs of Australians with disability in a fully-funded NDIS scheme.
The stats, said the treasurer, show “suicide is the leading cause of death in those aged 18 to 44” with “over 65,000 of our fellow Australians attempting to take their own lives each year”. He pointed to a commitment ot more resources to front line services BeyondBlue, Lifeline and Kidshelpline.
- There is $2.3 billion benchmarked for mental health care and suicide prevention.
- More Headspace centres will be created, and the model will also be expanded to those aged over 25 with a new Head to Health national network of 40 centres.
- More funding to treat eating disorders.
- Greater access to psychiatrists and psychologists through Medicare.
- The creation of a new National Suicide Prevention Office.
Mr Frydenberg said “new house starts are now the highest in 20 years. New loans to first home buyers reached their highest level in nearly 12 years. HomeBuilder has been a huge success.” He said the government’s $2 billion investment in affordable housing was bringing on more supply. To go even further:
- Another 10,000 first home buyers will be helped in buying a new home with just a five per cent deposit, and single parents will only need a two per cent deposit.
- The amount which can be released under the First Home Super Saver Scheme has increased from $30,000 to $50,000.
Tourism and aviation
- An additional $2.1 billion in targetted support for aviation, tourism, the arts and international education providers” has been announced.
- More than 800,000 half-price airfares.
- A further 120 facilitated flights by June 2022, funded at $56 million, so that Australians can return home from abroad. There have already been 127 government-facilitated flights which have brought 18,800 Australians home but there are currently 34,500 Australians wishing to return. Another $120m over four years has been benchmarked “to increase Australia’s consular capability and provide additional support to vulnerable Australian citizens overseas whose return to Australia has been impacted by COVID-19 travel restrictions”.
- Another $37.1 million over two years is benchmarked “to support the Indian government’s response to the COVID-19 crisis in India through the provision of urgently needed medical supplies” including those which the government announced last month.
- “Inbound and outbound international travel is expected to remain low through to mid-2022, after which gradual recovery in international tourism is assumed to occur,” the budget papers read.
- 13,200 future migrants and 45,000 families will now have to wait four years before they can have access to government payments, resulting in savings allegedly worth $671 million. This will apply to anyone receiving their residency from 1 January.
- COVID-19 has meant less deportations and also more people in immigration detention with $464.7 million to be spent on immigration detention.
- Visas will be streamlined to target highly skilled individuals (“the best and brightest”) but this will be done “when circumstances allow”.
- Mr Frydenberg said the government was “building the infrastructure our economy needs for the future with our 10-year, $110bn investment pipeline.”
- $15 billion in additional infrastructure commitments including for: the North-South Corridor in South Australia; the Great Western Highway and Newcastle airport in New South Wales; the new Melbourne Intermodal Terminal in Victoria; the Bruce Highway in Queensland; METRONET in Western Australia; highway upgrades in the Northern Territory; Light Rail Stage 2A in the Australian Capital Territory; and Midland Highway upgrades in Tasmania.
- A further $1 billion in road safety upgrades to save lives and a further $1 billion in local road infrastructure projects.
- The Building Better Regions Fund will support a further $250m of regional community infrastructure projects, creating more jobs.
- An investment to $270bn over 10 years will be poured into Australia’s defence capabilities.
- An additional $1.9 bn over the decade to strengthen our national security, law enforcement and intelligence agencies.
- A Digital Economy Strategy will be created at a cost of almost $1.2 billion, the government announced last week. It covers digital skills training, development of artificial intelligence technology, and tax breaks for computer games developers.
- The cyber security innovation fund will be expanded to train the next generation of cybersecurity experts. And undertaking a digital skills cadetship trial which combines workplace and vocational training.
Energy and Resources
On track to meet and beat our 2030 target. “We will do this with a practical technology focused approach,” Mr Frydenberg said.
- The government will unlock gas reserves in the North Bowen and Galilee Basins and invest in hydrogen-ready gas plants.
- $480 million in new funding for the environment, including $100 million to protect oceans.
- A further $1.6 bn to fund priority technologies, including clean hydrogen and energy storage.”
Youth activists pelled out “Fund our future not gas” in candles outside Australia’s Parliament House.