Memo from Mayo - May Budget 2023 A Meat and Potatoes Federal Budget
Welcome to my Memo from Mayo 2023 Federal Budget edition. While I'm analysing the finer details, my initial thoughts are positive. The Government has applied considered investment in critical areas such as cost of living, health and aged care, and energy and climate while also securing extra revenue from savings and other measures such as the Petroleum Resources Rent Tax reform.
After several years of deficits, the 2023 budget delivers a modest surplus of $4.2 billion. This is a substantial turnaround from recent COVID-19 effected budgets, largely assisted by a strong labour market and historically high commodity prices.
The Government claims the budget “strikes a balance between relief, repair, and restraint”. While I think that is a fair call, like all budgets there are measures that many will be happy with and some that will disappoint. On that basis I grade this budget as a B+.
Investment in climate and the environment is pleasing however I would like to have seen more investment in infrastructure in the regions and I’m very disappointed that $2.2 billion has been redirected from residential aged care resulting in a reduction from 70 places per 1000 people to 60.1 residential care places per 1000 people.
There isn’t much in this budget for working households and middle Australia may feel left out of this budget.
My summary of the headline budget measure:
- $236 million over 10 years from 2023-24 and $13.9 million per year ongoing from 2032-33 to remediate high priority flood warning infrastructure.
- Murray Darling Basin will receive $148.6 million over 4 years from 2023-24 for sustainability measures.
- $1.3 billion for household energy upgrades to improve energy performance.
- $2 billion to accelerate development of Australia’s hydrogen industry (Hydrogen Headstart).
- Nature Positive plan - $214.1 million over 4 years to enforce environmental laws, establish Environment Information Australia to provide authoritative environment information.
- $1.3 billion over 5 years from 2023-24 from the $1.9 billion allocated in the October budget to support the decarbonisation of existing industries.
- $20,000 instant asset write off for small businesses with aggregated turnover of less than $10 million from 1 July 2023 until 30 June 2024.
- Small and medium businesses with aggregated annual turnover of less than $50 million will be able to deduct an additional 20 per cent of the cost of eligible depreciating assets that support electrification.
$4.9 billion over 5 years to support people receiving working age payments:
- Increase in the base rate of working age and student payments by $40 per fortnight, applies to Jobseeker, Youth Allowance, Parenting Payment (partnered), Austudy, ABSTUDY, disability Support Pension (Youth), and Special Benefit payments.
- Extend eligibility for the existing higher single JobSeeker Payment rate for recipients aged 60 years and over to recipients aged 55 years and over.
- Increase of $92.10 per fortnight for Jobseekers aged 55 years and older.
- $3.7 million in 2023-24 to provide age and veteran pensioners a once-off credit of $4,000 to their Work Bonus.
- Work with states and territories to negotiate a 5-year National Skills Agreement to be in place by January 2024.
- $8.6 million over four years to 2026/27 and $1.5 million from 2027/28 to design and implement the Australian Skills Guarantee – opportunities for apprentices, trainees and paid cadets (including regional Australia).
Cost of living
- $3 billion for energy bill relief to 5 million households and 1 million business. From July 2023 up to $500 per eligible household and up to $650 per eligible small business.
- $1.3 billion household Energy Upgrades Fund to create low interest loans and fund upgrades to social housing.
- Increasing maximum rates of Commonwealth Rent Assistance by 15 per cent, $2.7 billion over 5 years.
- New incentives to encourage the supply of rental houses:
- Reduction in the withholding tax rate for eligible fund payments from managed investment trusts for newly constructed build to rent developments from 30-15 per cent.
- Increasing the capital works tax deduction (depreciation) rate from 2.5 to 4 per cent.
- Estimated to increase rental properties by 150,000 over 10 years.
- Increasing National Housing Finance and Investment Corporation’s liability cap by $2 billion to a total of $7.5 billion.
The budget includes $5.7 billion in funding over 5 years for primary healthcare services and Medicare. These include the following issues on which I have advocated to Government:
- $3.5 billion to triple bulk billing incentives for many common GP consultations, for children aged under 16 years, pensioners and other Commonwealth concession card holders.
- $81.8 million for changes to encourage nurses, midwives, First Nations health workers and international medical graduates to work in regional and rural areas and aged care.
- $951.2 million upgrade My Health Record, to support sharing of information for better patient safety
- Expanded PBS listing of Trikafta to include young people aged 6 to 11 years with cystic fibrosis
Unfortunately the scheduled fee for General practice consultations does not appear to have been increased to keep pace with the cost of providing these services.
Other health initiatives:
- Enabling purchase of two months’ worth of medicine for the price of a single (one month) prescription for more than 300 common PBS medicines, saving eligible patients an estimated $1.6 billion and reducing GP waiting lists. Of this, $1.2 billion for community pharmacies to administer vaccines, opioid dependency programs and medication management and review. I am urgently seeking more information as to whether $734.4 million to double incentives for pharmacies in MM3-7 locations will address the impact on financial sustainability of community pharmacies in regional, rural and remote locations such as many here in Mayo.
- $358.5 million for 8 new Medicare Urgent Care Clinics reducing pressure on other parts of the health system, much needed in Mayo.
- $445.1 million to improve provision of team-based primary care through general practice.
- $98.2 million for new Medicare rebates for consultations longer than 60 minutes to support patients with chronic or complex needs, including mental health issues.
- $46.8 million for Medicare rebates for nurse practitioners such as the Kangaroo Island nurse practitioner program. Nurse practitioners and participating midwives will also be able to prescribe PBS medicines and services under Medicare to help make care more accessible and affordable in rural and regional parts of Mayo.
$586.9 million for more critical mental health services, to address workforce shortages, including:
- 500 each extra postgraduate psychology places and internships for provisional psychologists.
- training the broader health workforce regarding mental health issues.
- expanding supports for our most vulnerable.
ALCOHOL AND DRUGS
• $68.3 million for better drug and alcohol prevention and treatment.
- $11.3 billion for a 15% pay rise for aged care workers including registered and enrolled nurses, assistants, home care workers, to bring them closer to parity with disability support workers.
- Aged care residential places reduced from 78 to 60.1 places per 1,000, redirecting $2.2 billion to other areas within aged care.
- Extra funding to implement Royal Commission recommendations to strengthen regulation of aged care including a new aged care Act and improved delivery of aged care services.
- $338.7 million over 4 years to improve the in-home aged care system including for an additional 9,500 home care packages – noting we often find if people are allocated a package, the services are not always available in our region.
- 300,000 fee free VET and TAFE training places will support critical industries including in the care sector.
- NDIS investment of $732.9 million to improve NDIS capability and systems and support participants to manage plans, as well as cracking down on rorting in the sector.
EDUCATION AND CHILDCARE
- $35 million over 4 years to attract and retain more teachers into the profession.
- $18 million in grants available to fund new childcare centres for priority areas in childcare ‘deserts’ including several in Mayo (Mount Barker, Nairne, Yankalilla, Strathalbyn surrounds and Goolwa/Port Elliot).
- $1.4 billion increase in childcare subsidies, total government expenditure $55.31 billion over 4 years.
ABORIGINAL AND TORRES STRAIT ISLANDER COMMUNITIES
- $1.9 billion in closing the gap including $561.6 million for better health (cancer and smoking including vaping) and $410.4 million for housing and infrastructure.
- $45.2 million over 4 years in extra funding for the Office of the Australian Information Commissioner and a standalone Privacy Commissioner to better protect our privacy following recent data breaches.
- $326.7 million to support the National Plan to End Violence against Women and Children 2022-2032. In part, funding will help separated couples including people at risk of domestic or family violence to settle small property disputes quickly and fairly. However more needs to be done by the Government working with states and territories on legal aid reform to meet the needs of those who cannot afford legal representation.