Federal Budget 2021: Cash splash the path to rebuilding from pandemic

Josh Frydenberg has handed down a budget that would have been unimaginable even six months ago — and which, with an election in the offing, challenges Labor on its home turf.

Australians all let us rejoice, for money’s nearly free.

Thanks to record low interest rates as well as Australia’s success at beating the coronavirus, on Tuesday night Treasurer Josh Frydenberg handed down a budget that would have been unimaginable as recently as six months ago — and which, with an election in the offing, challenges Labor on its home turf.

Pointing to a future where the economy will be supported by tradies, manufacturing, and digital skills, Mr Frydenberg noted that even in the seven months since the government’s last budget, things had improved far more than even he or Treasury had ever thought possible.

“Consumer sentiment is at its highest in 11 years. Business conditions reached record highs. And more Australians are in work than ever before,” Mr Frydenberg said, addressing the evening session of parliament.

Treasurer Josh Frydenberg. Photo: Sam Mooy/Getty Images

Pointing to the role skilled workers will play, Mr Frydenberg told The Daily Telegraph, “More tradies on the tools means more Australians in jobs. That’s why the Morrison government is supporting more apprentices and trainees, building a pipeline of skilled workers to secure Australia’s recovery,” said Mr Frydenberg.

Australia, Mr Frydenberg said, is expected to post a $161 billion deficit.

But with so many jobs recovered, the Treasurer said that figure is $52.7 billion lower than was anticipated just six months ago.

“As a share of the economy, net debt is around half of that in the UK and US and less than a third of that in Japan,” he said.

The extent to which interest rates, which Treasury expects to stay low for some time, have allowed the government to go on a borrowing spree was revealed in a fascinating line buried in the budget papers revealed Australia would have to borrow an additional $1.6 trillion before the interest as a share of GDP reached the 1990s peak of 2 per cent.

The economy will be supported by tradies, manufacturing, and digital skills, Mr Frydenberg said.

With these improved economic conditions as his backdrop, Mr Frydenberg laid out an ambitions serious measures all around the themes of jobs and security.

Tax cuts and incentives were high on the list, as were a number of measures to build Australia’s skills base, both in hi-tech and blue collar sectors of the economy.

Low and middle income earners will keep their income offset this year, and the government also extended temporary full expensing and temporary loss carry-back for an additional year, giving businesses a tax break of around $20.7 billion.

Mr Frydenberg touted the success of one of the government’s signature measures, the HomeBuilder program, and announced more measures to allow savers to dip into their superannuation to help invest in a home.

The Budget features 70,000 new apprenticeships and traineeships.

NSW will also have particular cause to celebrate the budget, with $43.5 billion expected to flow to the state from Tuesday night’s budget.

The Treasurer also pledged a doubling of the JobTrainer fund to support 450,000 training places as well as the creation of 170,000 new apprenticeships and traineeships, as well as $1.2 billion in a Digital Economy Strategy.

And in a sign that the government is serious about innovation, the Budget also contained provisions for a “patent box” that would give tax breaks to innovating local medical and biotech companies to undertake their research here – and keep the patents in Australia.

But securing the economy and peoples’ jobs was only half of the equation.

Aiming squarely at Labor’s heartland, and looking to put to rest criticism of the government’s record on women, the Treasurer pledged new investments in childcare, aged care, the NDIS, mental health, and women's’ safety.

Mum Vanessa Iskander with her kids Ramsis 5, Zakki 4 and Zara-Rose, 2. Picture: Tim Hunter.

The Treasurer also pledged that the NDIS would always be fully funded under a Coalition government, and announced $1.7 billion in new funding for aged care – including an extra 80,000 new home care packages over two years.

Mental health received a $2.3 billion boost as well, with a “zero suicide” plan aimed at saving 3000 lives each year the creation of a new National Suicide Prevention Office, and additional Headspace centres.

Mr Frydenberg also, for the first time in recent memory, released a specific “Women’s Budget Statement” signed off by Minister for Women Marise Payne, Families and Social Services Minister Anne Ruston, and Minister for Women’s Economic Security, Jane Hume, aimed at ensuring and improving women's’ safety, economic security, and workforce participation.

Minister for Families Anne Ruston signed off on the Women’s Budget Statement. Picture: AAP Image/Mick Tsikas

As part of the women-focused measured, the government also unveiled a new National Plan to reduce violence against women as well as a $1.1 billion investment to help reform the family law system and deliver accommodation and support to women escaping abusive relationships.

“One in four women experience violence for a current or former partner,” Mr Frydenberg told parliament.

“This must stop.”

Opposition Leader Anthony Albanese will deliver Labor’s reply speech Thursday night.

Originally published as Federal Budget 2021: Cash splash the path to rebuilding from pandemic