Treasurer Jim Chalmers will hand down the budget on Tuesday, May 9, 2023, which is the usual convention for the Budget to be on the second Tuesday of May.
Australia’s Federal Budget for 2023 is expected to be a “sensible” and “responsible” one that addresses various issues ranging from welfare to Tax, Super, and cybersecurity and will provide the targeted cost of living relief without making a bad situation worse.
Here is a breakdown of some key areas that have been revealed so far:
Taxes
The government has proposed a series of tax reforms to increase revenue from various sources such as petroleum resource rent, tobacco, and superannuation balances.
Firstly it announced its intention to increase the revenue from the petroleum resource rent tax by $2.4 billion over the next four years. In doing so, they have also pledged to adhere to the guidelines set forth by the Organisation for Economic Co-operation and Development (OECD) in establishing a minimum tax rate of 15 per cent and placing limits on debt-related deductions.
Furthermore, the government has proposed a new taxation policy regarding superannuation balances. Starting from 1 July 2025, superannuation balances exceeding $3 million will be subjected to a tax rate of 30 per cent for future earnings. These measures aim to increase government revenue and improve the country’s overall economic stability.
NDIS
The NDIS will have a cap on growth at 8 per cent a year, and there will be a crackdown on providers price-gouging products and services for people with disabilities.
Energy transition
In the first year, a “net zero authority” will be established, which will cost $23 million. The funding for this authority will come from the Powering the Regions Fund, which is administered by ARENA and amounts to $400 million.
Furthermore, small and medium-sized businesses with an annual turnover of less than $50 million will soon have access to the Small Business Energy Incentive. This incentive, which was announced prior to this year’s Federal Budget, will provide a 20 per cent tax deduction bonus for spending that supports the electrification and more efficient use of energy, up to a total expenditure of $100,000, with a maximum bonus tax deduction of $20,000 per business.
Education and training
The government is prepared to invest an additional $3.7bn for a five-year national skills agreement, with $400m to support another 300,000 TAFE, vocational education, and training fee-free places.
Superannuation tweaks
Payday superannuation will peg superannuation guarantee payments to an employee’s payday (rather than on a quarterly basis as currently required). A new tax rate of 30 per cent will be installed on superannuation balances over $3 million.
EV Infrastructure
The NRMA has been allocated $39.3 million to construct 117 EV fast chargers throughout the country. This initiative aims to increase the confidence of current and prospective EV drivers by creating a national network of chargers. Moreover, each charging site will have a minimum charging rate of 75kW, even if four vehicles are charging at the same time.
ARENA plans to invest over $130 million in the Driving The Nation Fund to encourage the adoption of EVs and reduce emissions from road transport. This fund will support projects that enhance access to advanced EV charging infrastructure, resulting in innovative charging solutions for all Australians, including those who reside in apartments and remote or regional areas.
Cost of living
A $14.6bn cost of living package over four years includes a $1.5 billion electricity package that will provide up to $500 in power bill relief to more than five million households and one million businesses.
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