HE Albanese Labor government has handed down its first budget following its election victory. Treasurer Jim Chalmers takes the helm as Australia’s 41st Treasurer, in a post-COVID lockdown world, gripped with rising cost-of-living, interest rates and inflation and the threat of a global economic recession.
Treasurer Chalmers announced a scheme will see one million new homes built to tackle Australia’s affordability and housing crisis. The NSW DPE predicted low growth over the next 5 years in housing supply, and with desperate need for social housing (a waitlist of over 119,000 people) – this appears to be part of the answer from Albanese’s government. The Labor government is also aiming to add an extra 20,000 affordable homes over five years which means more than 200,000 properties will be built a year to answer Australia’s housing crisis.
The Treasurer declared that cheaper childcare would be Labor’s “biggest on-budget commitment” in this month’s budget. Following declarations on Labor’s election campaign to reduce childcare costs, it appears as though families with young children are about to benefit from the budget update. Approximately $5.4 billion will go into the new policy of cutting childcare costs from July 2023, despite desperate calls to bring the policy forward.
The Albanese government stuck to its pre-election promise to boost aged care spending by $2.5 billion across fours, second only to childcare in scope among its campaign pledges. That outlay included funding to increase on-site hours of registered nurses and improve food and nutrition. However, the Fair Work Commission (FWC) is set to hand down its decision over a wage rise for the sector that some have estimated could cost the budget an extra $3 billion, and the government has committed to funding this. However, in a submission to the FWC Treasury said a potential 25% increase in wages may boost the workforce by five to 10% but also fuel inflation.
The federal government has lifted the permanent migration program from 160,000 visa places to 195,000 in 2022-23 following its Jobs and Skills Summit. According to Immigration Minister Andrew Giles, there’s a current backlog of around 872,000 applications. According to the Australian Constructors Association, the industry faces a critical shortage of 105,000 workers within the next 12 months. Meanwhile hospitality industry jobs platform Barcats Australia estimates the sector needs more than 200,000 staff.
The government will also provide funding of up to $200 million a year for projects to help mitigate and prepare for climate change. Treasurer Chalmers acknowledged that the economic cost of natural disasters is also high. The government has committed $3 billion in the contingency reserve to meet the disaster recovery costs from the flooding events this year. To better prepare for future disasters, the government will invest up to $200 million per year on prevention and resilience initiatives through the Disaster Ready Fund. The Fund will support projects such as flood levees, sea walls, cyclone shelters, evacuation centres and fire breaks.
The government will establish the National Reconstruction Fund to provide $15 billion of capital to transform and strengthen priority industries. The National Reconstruction Fund will provide loans, guarantees and equity, partnering with the private sector to unlock further investment. It will invest in seven priority sectors including in clean energy manufacturing; in medical manufacturing; in new technologies; in agriculture; in critical minerals.