Responsible spending in the face of an uncertain global economy was the tagline of the 2023 Federal Budget — with a $14.6 billion cost-of-living package at its centre.
Jim Chalmers on Tuesday handed down his second federal budget as treasurer, describing it as a balancing act between relief, repair and restraint.
Households, he admitted, were struggling as inflation hit families’ hip pockets.
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But an uncertain global economy — and the prospect of low growth — is preventing any stimulus packages.
Here, 7NEWS.com.au breaks down the winners and losers from the 2023 Federal Budget.
Winners
Welfare recipients
Speculation over an increase to JobSeeker was rife in the lead-up to Tuesday’s budget.
When it was handed down on Tuesday, it was confirmed that a blanket $40-a-fortnight increase would be implemented.
Over-55s who receive the payment will get an even larger increase, bringing them in line with the inflated rate given to over-60s.
This is because, the Treasurer says, it is harder for older Australians to find work.
He adds that the vulnerable group is disproportionately women.
“Until now, people aged 60 and over and on payments for a long time have received a higher rate, in recognition of the additional barriers they face finding work,” he said.
“But the truth is, it gets more difficult earlier than that.
“The majority of people aged 55 and over on JobSeeker are women, many with little to no savings or superannuation, and who are at risk of homelessness.
“So tonight, we’re extending the extra support for those aged 60 and over to include Australians aged 55 and over—– more help for some of the most vulnerable in our community.”
This measure equates to a $92.10 increase per fortnight.
Single parents
More than 50,000 single parents will also be $176.90 per fortnight better off in an expansion of the parenting payment scheme.
The cut-off for the payment will be raised from when the child turns 14, instead of when they turn eight.
Currently, single parents are forced to turn to JobSeeker when their children turn eight.
The $922.10 those parents will be able to access each fortnight is a significant amount more than the JobSeeker rate.
The measure was announced by Prime Minister Anthony Albanese, who said it would bring more stability to single-parent households.
“What that will do is to make sure that women, in particular, but also fathers in situations of raising children by themselves, can have that sense of security, that children can be looked after,” he told reporters in Perth.
“They’re deserving of more support.”
The government estimates 57,000 people will benefit from the change.
Aged care workers
People working aged care — from carers to cooks — will benefit from a pay rise detailed in the budget.
An $11.3 billion package will fund a 15 per cent increase in award wages for more than 250,000 workers.
For some, this will equate to $10,000 per year.
“This pay rise will help retain, reward and recruit the hard-working people who care for our loved ones as they grow old,” Chalmers said.
“And the message from our government to the aged care workers of Australia is simple — you deserve every cent.”
Young carers
Young people who are caring for a loved one will get a cash boost to enable them to study.
Just shy of $10 million was pledged to the Young Carer Bursary Program, increasing the funding for those aged 12 to 25 from $3000 to $3768.
The number of bursaries offered each year will increase to about 1600 over the next three years.
Minister for Social Services Amanda Rishworth said demand for the Young Carer Bursary Program has consistently exceeded the number available.
“We don’t want young carers missing out on their education or missing the opportunity to connect with friends,” Rishworth said.
“This funding boost will increase the number of bursaries available by almost 60 per cent.”
First home buyers
An expansion of a program aimed at first homebuyers could mean more young people get a foot in the door of the housing market.
The first home guarantee and its regional and family home equivalents will have their criteria expanded from July 1.
The changes include altering the definition of a “couple” from meaning married or de facto relationships to “any two eligible individuals”.
This opens up the criteria to include siblings, a parent and child, or two friends.
People who have previously owned a home will also be eligible, on the provision they haven’t owned one in the last 10 years, in a bid to help those who had fallen into financial hardship.
Under the schemes, the federal government acts as guarantor which allows people to buy a house with a deposit as low as five per cent, and avoid paying costly lender’s mortgage insurance.
Australian permanent residents will also be eligible for the schemes, rather than just citizens.
Losers
Multinationals
The government will introduce a global minimum tax and a domestic minimum tax to ensure that large multinational companies pay tax in Australia.
From January 1, 2024, large Australian multinationals and the Australian arms of foreign multinationals will pay an effective tax rate of at least 15 per cent.
A year later, Australia will also be able to tax the foreign operations of large foreign multinationals that operate in Australia, to ensure that they have paid at least 15 per cent tax.
Budget papers say the measures are part of the OECD efforts to make multinationals pay a fair share of tax.
Smokers and vapers
Tens of millions of dollars were allocated in the budget to combat smoking — and a significant amount of that money will be recouped by hiking the tax on tobacco.
Some $63.4 million was budgeted for national health campaigns to deter smokers, and $141.2 million to expand the Tackling Indigenous Smoking program.
Chalmers said the government will also be raising the tax on tobacco by 5 per cent annually for three years.
Since the October budget, the government has revised up the amount it expects to make from tobacco tax in the 2023-24 financial year, adding $300 million.
The government is also proposing stronger regulation on vapes, including crackdowns on their importation, contents and packaging.
It would require pharmaceutical-like packaging, a reduction in the allowed nicotine concentrations and volumes and a ban on single-use vapes.
Health Minister Mark Butler said children under the age of four had reported to Victoria’s poisons hotline after they used a vape.
“This is a product targeted at our kids, sold alongside lollies and chocolate bars,” he said.
“Vaping has become the number one behavioural issue in high schools, and it’s becoming widespread in primary schools. This must end.”
People with more than $3 million in superannuation
Tax concessions for those with more than $3 million in their superannuation balances will also be tightened.
About 80,000 people will be affected by the changes.
Currently, earnings from superannuation in the accumulation phase are taxed at a concessional rate of 15 per cent.
Starting in the 2025-26 financial year, that rate will double for balances above $3 million.
“The modest adjustment we announce today means 99.5 per cent of Australians with superannuation accounts will continue to receive the same generous tax breaks, and the 0.5 per cent of people with balances above $3 million will receive less generous tax breaks,” Chalmers said.
Those earning less than $126,000
Australians earning less than $126,000 will notice a slimmer tax return when they lodge this end of financial year.
That’s not actually because of anything in Tuesday’s budget — but rather the expiry of a measure that was in last year’s.
The low- and middle-income tax offset, dubbed LMITO, was only meant to be paid once.
But, with the financial pressures the pandemic placed on households, it was extended twice.
Depending on how much someone earned, workers would receive up to $1080 offset from their tax returns when they filed them.
However, it was supersized last year in anticipation of the federal election, and then not renewed.
Tuesday’s budget confirmed that it wouldn’t return this tax season.
H&R Block’s Director of Tax Communications Mark Chapman said it wasn’t likely LMITO would return – but he did suggest other measures would take its place.
“This tax offset, which delivered a tax break of up to $1,500 for people earning up to $126,000, actually expired at the end of the last tax year, on 30 June 2022,” he said.
“Many voters won’t cotton on to that fact until they come to lodge this year’s tax return and they notice that the size of their refund has dramatically shrunk.
“The treasurer has been under pressure either to reinstate the LMITO or introduce some other measures to protect low-and-middle income earners.
“It now appears clear that he won’t be reinstating the LMITO, which appears to have gone for good. Will he replace it with something else? Possibly, but it’s unlikely to be on the tax side.”
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