Priorities
Five pillars for stronger national growth
- Cheap, reliable and clean energy
- Skills and training
- Affordable childcare
- Productivity-enhancing infrastructure
- Greater sovereign manufacturing
Snapshot of key spending
- $15b national reconstruction fund – partnering with the private sector and superannuation funds – for investments in modern manufacturing, innovation and technology projects.
- $6.2b to increase rebates for childcare and remove salary caps, with a goal of subsidising 90 per cent of the cost of childcare for all families, regardless of income.
- $2.5b aged care package to fix aged care 'crisis' and overhaul the sector.
- $1.1b to boost Australia’s technology industry making 465,000 TAFE places free, adding 20,000 university places, and pledging to reach 1.2m technology jobs by 2030.
- $8.6b cost of living measures including the 22.1c/litre petrol excise cut, $420 tax offset for low and middle income earners, and $250 bonus for pensioners and welfare recipients.
Opposition Federal Budget Reply Insights
The Opposition’s Federal Budget Reply was hard on policy and reform, but light on spending allocations and tax implications. Labor’s Reply had a laser focus on five key areas to support economic growth – clean energy, education, child care, infrastructure and manufacturing – and also a particular emphasis on much-needed repair for the aged care sector.
Tackling the Aged Care crisis
The Opposition’s $2.5 billion package for the Aged Care industry includes higher pay for workers, more registered nurses for aged care homes, better food and safer conditions for residents. This may help meet the pay rise of 25 per cent for more than 200,000 aged care workers that unions are advocating for. Currently the starting rate for a personal carer is $21.96 an hour – only $2 higher than the national minimum wage.
The detailed five-point Aged Care plan will:
- Require a registered nurse on site 24/7 in residential care;
- Give carers more time to care through a mandated increase to 215 minutes of direct care a day;
- Formally support a pay rise for aged care workers throughout the industry;
- Require better food for residents with compulsory nutrition standards;
- More transparency in the system so we know taxpayers’ money is going on care; and
- Instill integrity and accountability in the aged care system with more funding, expanding the aged care safety commissioner’s powers, and by making the reports and spending public.
Renewable energy superpower through manufacturing and innovation
Both the Government’s Federal Budget and the Opposition’s Budget Reply focused on a strong sovereign manufacturing and renewable energy agenda for a future made in Australia to create 604,000 new jobs and increase productivity. Expanding on-shore manufacturing capability will also help ease supply chain pressures.
The Labor Reply acknowledged that Australia is unmatched when it comes to its renewable potential. We have the resources to produce clean energy minerals such as lithium, copper and nickel as well as the ability to manufacture the finished products such as wind turbines and batteries, but the upfront capital costs stand in the way. Government investment into manufacturing can alleviate these high costs and we should be competitive in this sector.
From an innovation perspective, Australia needs a strong innovation and R&D led agenda to maintain our current economic standing and develop new competitive industries to drive productivity into the future. Reading between the lines, the key areas of innovation will likely lie in the move to expand sovereign manufacturing and investment in renewable energies. A stronger innovation agenda is necessary to grow the Australian economy out of deficit following the absence of specific long-term innovation measures in this year’s Budget or the Reply.
Taking action on key issues
The Opposition is strongly committed to taking action on a range of issues they have given high priority status including:
- Building safe and respectful workplaces for women by implementing all recommendations from Respect@Work report;
- Creating a National Anti-Corruption Commission for public money to be invested in the public interest;
- Increasing Australia’s defence through improving technology and capabilities – and deliver them when they are needed;
- Making sure Australia’s veterans get the care they need through accessing funding and services; and
- Establishing a Disaster Ready Fund and creating a long term plan to mitigate the impact of Australia’s natural disasters.
Policies to lift wages, stem the cost of living, and secure jobs growth
The Opposition has warned that while unemployment rates are at a record low they hide massive underemployment where many Australians are working, but only a few hours a week, without a sustainable income. Labor argued the Government’s Budget missed many opportunities for training the Australian workforce in areas experiencing critical skill shortages such as the tech industry. If elected, they are pledging to close the digital skills gap with the creation of 1.2 million jobs by 2030.
To help more women increase their participation in the workforce, the Opposition will make child care more accessible removing the activity test for the child care subsidy and more affordable with the aim of rebating 90 per cent of the costs.
Both sides of Parliament have been in agreeance that Australian’s need wages growth to keep up with the rising costs of living, however, the details as to how they will achieve wages growth have been sparse. Since the Budget announcements, the Australian Council of Trade Unions have lobbied the Fair Work Commission for a that - if successful - would see almost 3,000,000 Australians receive higher incomes.
The Budget Reply confirmed they will keep universal superannuation strong to ensure every Australian can continue saving for financial security in the future.
Cost of Living
While the temporary cut to the fuel excise will be rolled out in the coming weeks, the Government has made it clear that’s what it will be – temporary. The Opposition will continue the 22c per litre cut, but has claimed it’s not a long term strategy. If this cut is removed too soon, they could potentially face a backlash, particularly from cash-strapped mortgage holders, as they battle with the cost of living, driven by the rising cost of fuel.
The Opposition has said a post-election budget will happen, however, it will not be a major economic alternative to what is currently on the table. If elected, Labor has confirmed they will provide a complete Budget which will see them drill down into the details of key spending and we will learn more about the tax implications. No doubt, we will gather more details on these policies, as well as many more new initiatives from both sides in the lead up to the May election.
Federal Budget Report 2022-23
