Are you a winner or a loser in this budget?
Nurses, schoolchildren and beer drinkers all had reason to toast this year’s budget. Some notable others much less so.
By Paul Sakkal
Credit: Marija Ercegovac
The budget has been handed down, promising relief on income tax, power bills and medicine – while cigarette smokers punched a bigger- than-expected hole in the budget.
Here are the biggest winners and losers from this budget.
WINNERS
Low-income earners: All Australians will benefit from a reduction of the lowest income-tax threshold, from 16 per cent to 14 per cent, over the next two years, delivering about $10 a week when it’s fully in place in mid-2027. Labor admits the surprise cut, which will cost the budget $17 billion, is modest. The reduction will mean more to those at the lower end of the income scale.
Electricity users: Households will benefit from another round of direct government subsidies that energy companies will automatically deduct from power bills. The previous round of $300 subsidies ends in June. The new policy will reduce by $150 the price of electricity for the last six months of this year. Opposition Leader Peter Dutton has supported the measure, after criticising the earlier boost.
Aged care nurses: A further $2.5 billion has been put towards lifting pay for aged care nurses. Nearly $18 billion has been spent on wage increases in the aged care sector.
Employees: Workers on less than $175,000 will be able to change jobs more easily if a Labor plan to ban most non-compete clauses passes parliament. It suggests the move could lift the wages of those workers by as much as $2500 a year on average.
University students and graduates: All student loans will be wiped by 20 per cent. The policy, which the Coalition has cast as a political bribe, will be legislated after the election (i.e. only if Labor wins). The move will slash total student debt by $19 billion.
People needing healthcare: An $8.5 billion boost to make GP visits cheaper, $644 million to build 50 more urgent care clinics, and $690 million to reduce the price of a prescription to $25. Big spending on health has been the centrepiece of Labor’s months-long quasi election campaign. It’s all been matched by the Coalition on the eve of an election.
Beer drinkers: The cost of a day at the pub will remain stagnant for two years. The government is freezing the indexation on draught beer excise, costing the budget $200 million.
Public schoolchildren: More than a decade after former prime minister Julia Gillard began the Gonski education reforms, Labor has booked multibillion-dollar deals with each state and territory to fund public schooling at an agreed national level.
LOSERS
The next generation of taxpayers: After two surpluses, the nation is back in the red. This year’s deficit is projected to come in at $26.7 billion, growing to $42 billion the next year then hovering in the $35 billion region. Debt as a proportion of GDP will grow from 33.7 per cent to nearly 37 per cent, and gross debt will rocket past $1.2 trillion.
Economists: The country’s budget watchers have been crying out for major structural reform to lower the income tax burden, increase productivity and get rid of what economist Chris Richardson calls Australia’s “dumb” tax system. Treasurer Jim Chalmers’ income tax tinker is something, but the suite of budget measures is unlikely to satisfy those calling for full-scale reform to boost living standards and turbocharge the economy.
Consultants at firms such as PwC: Private sector consultants out, bureaucrats in. Labor is banking another $700 million from its crackdown on consultants and labour hire. The opposition has been arguing against working from home for public servants.
Welfare recipients: The cost of everything has risen after a global inflation outbreak took hold, but JobSeeker and rent assistance will not receive a top-up. The Labor government has largely resisted the big-spending demands of the welfare lobby, though rental help was lifted last year.
Sin taxes: The skyrocketing price of cigarettes has turned smokers away from legal tobacco in droves – and that’s punched a $6 billion hole in the budget. The significant excise the government slaps on cigarettes (which can cost more than $60 a pack), normally brings in billions every year – but huge growth in vaping and the illegal tobacco market has meant those tax dollars are dwindling.
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