Federal Budget focuses on cost of living

MILLIONS of Australians are set to benefit from cost of living relief, free GP visits and lower than expected power prices.

Treasurer Jim Chalmers has promised the relief measures won’t worsen already high inflation, treading a delicate balance as he handed down his second Federal Budget in Canberra today (Tuesday, May 9).

An increase to welfare payments, a boost to bulk billing and energy bill relief are some of the key items in the 2023/24 budget, which includes $14.6 billion in targeted cost of living measures at a time of global economic uncertainty.

The treasurer trumpeted a previously flagged surplus for the current financial year of $4.2 billion, but it won’t continue for long, with a $13.9 billion deficit forecast for 2023/24.

Deficits will continue until at least 2026/27, albeit at much lower levels driven by improvement to the budget bottom line.

Dr Chalmers said cost of living support measures would reduce inflation by 0.75 per cent in the next financial year.

“In all our decisions, we seek to strike a considered, methodical balance between spending restraint to keep the pressure off inflation, while doing what we can to help people struggling to make ends meet,” he said in his budget speech.

“This budget is carefully calibrated to alleviate inflationary pressures, not add to them.”

The measures include the new expansion to bulk billing, with a $3.5 billion boost that will provide free GP consults to more than 11 million eligible patients.

The bulk billing incentive has been tripled for GP appointments for concession card holders and patients under the age of 16.

As well, the base rate of JobSeeker and Youth Allowance will rise by $40 a fortnight from September.

Eligibility for a higher rate of JobSeeker will be lowered from 60 to 55, following a rise in the number of older Australians on the payment.

About 52,000 Australians aged between 55 and 59 will get an extra $92.10 per fortnight under the higher JobSeeker rate.

It’s estimated $4.9 billion will be spent during the next five years to support more than 1.1 million people receiving income support.

Single parents will also see a boost, with the threshold for the single parent payment increasing to when the youngest child turns 14, up from the previous limit of eight-years-old.

The government will also increase the maximum rate of commonwealth rent assistance by 15 per cent for 1.1 million households, which is set to cost $2.7 billion over the next five years

With rising power prices being one of the biggest costs to households, energy bill relief has also been a key feature of the federal budget.

The government has set aside $3 billion in relief measures as part of partnerships with states and territories.

Energy bill relief of $500 will be handed out to five million households, while $650 payments will be sent to one million small businesses.

It’s forecast energy relief measures would lead price increases for electricity being 25 percentage points less, while gas prices rises will be 16 percentage points lower.

Changes to medicines have also been included in the budget which will see patients able to get two months’ worth of medicine at once.

The measure is expected to save $1.6 billion over the next four years.

Medicare will also be bolstered with a $5.7 billion investment, which will aim to increase access to primary care and allow for GPs to stay open for longer hours.

While the budget has forecast inflation to have peaked and is falling, it won’t be back in the central bank’s preferred target band of two to three per cent until 2024/25.

The nation’s underlying cash balance has improved by more than $125 billion during the five years to 2026/27.

Winners and losers in the 2023/24 Federal Budget

WINNERS:

• Welfare recipients – Extra $40 a fortnight
• Aged care workers – 15 per cent pay rise
• Clean energy sector – Incentives for households and businesses
• Renters – 15 per cent lift in Commonwealth Rent Assistance
• Patients – More bulk-billing and after-hours care

LOSERS:

• Smokers – 5 per cent hike in tax every year for three years
• Multinationals – 15 per cent global minimum tax
• Wealthy retirees – Higher tax for balances over $3 million
• Offshore gas producers – Extra revenue from Petroleum Resource Rent Tax

 

 – WITH AAP