Treasurer Josh Frydenberg has unveiled a pre-election budget spliced with billions of dollars worth of tax offsets, cash payments and fuel excise relief.
A one-off tax break of $420 will go to more than 10 million Australians earning up to $126,000 a year.
Their total tax relief at the end of this financial year will be bumped up to $1500 for individuals – and up to $3000 for couples – already benefiting from the low to middle income tax offset.
Six million welfare recipients, veterans, pensioners, eligible self-funded retirees and concession card holders will get a $250 cost of living payment in April.
The federal government will also cut the fuel excise in half to 22.1 cents for the next six months, projecting savings of around $30 a week – or $700 in total – for a family with two cars filling up once a week.
The competition watchdog will ensure the saving is passed on by retailers, and the government has guaranteed no cuts to roads spending, which is funded by the excise.
Mr Frydenberg said an unemployment rate heading below four per cent, lower taxes and programs helping 100,000 Australians into their own home were evidence of the government’s economic plan working, urging voters to stick with the coalition.
He said the measures announced in the 2022/23 budget were “temporary, targeted and responsible” and address cost of living pressures.
“Practical measures that will make a difference.”
Australian Council of Trade Unions president Michelle O’Neil says one-off payments do not make up for wage stagnation.
Australian Council of Social Service chief Cassandra Goldie says much of the assistance goes to people who don’t need it.
“We’ve got people who are facing homelessness and hunger and we didn’t get a budget that will tackle it in a permanent way,” she said.
Treasury has forecast a budget black hole of $78 billion for 2022/23, before the deficit contracts to $43.1 billion in three years time, as the economy continues to recover from the COVID-19 pandemic.
Tax breaks will also flow through to small businesses that invest in technology and employers who upskill their employees.
A small business will get a $120 tax deduction for every $100 they spend on training employees or on digital technologies like cyber security and web design.
There will also be up to $5000 for new apprentices and $15,000 wage subsidies for employers who take them on.
Defence and cyber security are among the big winners with a multi-billion-dollar spend on new military personnel, equipment and cyber intelligence agency, the Australian Signals Directorate.
The Australian Chamber of Commerce and Industry commended the budget’s investment but raised concerns about the lack of a long-term agenda.
“Regrettably, this year’s budget doesn’t address some of the more pressing challenges facing the Australian economy, including a far-reaching agenda for tax reform, stronger focus on innovation, and building business investment, supply chain capability and productivity,” chief executive Andrew McKellar said.
Shadow treasurer Jim Chalmers said if the budget wasn’t “ruined by rorts and weighed down by waste and mismanagement” there would be more room in it to support families and pensioners and invest in the future.
“Scott Morrison is only pretending to care about the cost of living because he has to call an election in the next fortnight, and he’s running out of time,” Dr Chalmers said.
Almost $18 billion has been put aside for regional infrastructure, agriculture and energy mainly in regions being targeted by the coalition at the election including the NSW Hunter, north and central Queensland, the Northern Territory and the Pilbara.
The government has also committed to faster rail projects linking Brisbane and the Sunshine Coast and Sydney to Newcastle.
The budget contains a further $1.3 billion for a package to end violence against women and children, as well as new spending on breast and cervical cancer screening.
Dominic Giannini
(Australian Associated Press)
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