Spending highlights & priorities
- Cost of living
- A stronger economy and lowering inflation
- Affordable housing
- Energy prices
- Community safety
Snapshot of key spending
- $9.4b investment into Medicare
- $6b temporary cut to fuel excise for 12 months
- $5b in essential infrastructure to get housing projects up and running
- $1b to establish the Critical Gas Infrastructure Fund
- $500m into women’s health
- $300m to reinstate Strategic Basin Plan
Opposition Federal Budget Reply insights
The Opposition Budget Reply was delivered in the landscape of a pending election. The Opposition previously matched most of the Government’s $40b in spending announcements – largely healthcare related, including additional Medicare funding, cheaper medicines, and Labor’s women’s health package, along with the extension of the energy bill rebates. To pay for matching Labor’s Medicare spending, the Opposition proposes to cut up to 41,000 public servants. Separately, the Opposition has pledged to repeal the Government’s $17.1b income tax cuts which were passed in Parliament the day after Budget, stating that the Budget must be fixed before Australia can afford meaningful tax cuts.
Addressing cost of living concerns through power relief and reducing fuel excise
After promising to repeal Labor’s tax cuts should they be elected, the Opposition promised to instead dedicate $6b to temporarily halving the fuel excise from 50.8c to 25.4c per litre for 12 months. While the Opposition confirm they will work with industry and the ACCC to ensure the cut is passed on to consumers in full, economists have suggested cutting the fuel excise could put upward pressure on inflation, counteracting the RBA’s efforts to lower interest rates. Separately, the Opposition has pledged to match the $6.8b Labor has proposed for extending the energy bill rebates.
Securing Australia’s energy production with gas and nuclear power
In an effort to lower energy prices, the Opposition has proposed to establish an east coast gas reservation to deliver gas to the domestic market, which would otherwise be exported overseas. As part of this, the Opposition has pledged $1b to establish the Critical Gas Infrastructure Fund and $300m to reinstate the Strategic Basin Plan, along with a review of gas projects with the aim of driving down wholesale gas prices. The Budget Reply also announced the proposed development of nuclear power plants in Australia. However, such nuclear plants are slated to come online from 2036 so the benefits to energy prices will still be at least a decade away.
Developing sovereign industries and unlocking new areas of the economy
The Opposition highlighted plans to redevelop sectors critical to strengthening the economy including mining, agricultural, construction, and manufacturing. The Opposition vowed to ‘return Australia’s position as a powerhouse’ in these sectors to build up our sovereign capabilities. Alongside building these areas, the Opposition wants to focus on developing upcoming areas and industries such as artificial intelligence, automation, cyber security, space, and bio and nanotechnologies.
Ensuring housing affordability for all Australians
The Opposition has pledged to cut permanent migration by 25 per cent while also banning foreign investors and temporary residents from purchasing existing homes for up to two years, which they claim will free up Australian homes and restore home ownership. They also announced a $5b investment in essential infrastructure to develop housing projects and unlock up to 500,000 homes, along with allowing first home buyers to access up to $50,000 from their superannuation to purchase a home.
Supporting Australia’s health care system
The Opposition announced a $9b investment into healthcare designed to boost bulk-billing rates, invest in hospitals in high-population growth areas and incentivise junior doctors to work as GPs to address the current shortage. Additionally, the Opposition has also pledged to guarantee cheaper medicines and lower the Pharmaceutical Benefits Scheme co-payment to $25, and pledged to match the Government’s $500m investment into women’s health. Youth mental health services was also a key mention in the Budget Reply, with the Opposition pledging to double the number of subsidised mental health sessions per annum (from 10 to 20) and invest an additional $400m into youth mental health services.
Backing small business and skills
The Opposition’s small business plans focus on reducing operational costs and promoting investment with measures such as the increased instant asset write-offs, energy rebates, fuel excise reductions, and meal expense tax deductions.
The Budget Reply proposes allowing small businesses with a turnover under $10m to claim tax deductions of up to $20,000 for meal and entertainment expenses (excluding alcohol beverages). The Opposition Leader emphasised that this policy would benefit both small businesses and the hospitality sector by increasing spending in cafes, restaurants, clubs, and pubs.
The Opposition also pledged to increase the instant asset write-off threshold to $30,000, likely on a permanent basis, allowing small businesses to immediately deduct the cost of eligible assets, helping small businesses invest in new equipment and technology. The Budget Reply also set a target of 400,000 apprentices and trainees in training across Australia and provide small and medium businesses with $12,000 to hire and train new apprentices in critical skills areas.
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