On 9 May 2023, Federal Treasurer, Jim Chalmers, handed down the 2023/ 24 Federal Budget.
Responding to the increased cost of living, the Budget provides several measures to support Australians through rebates on energy bills, increases in the payment rate of social security benefits for some recipients, and a substantial investment to increase the rate of bulk billing for doctor’s visits.
The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.
The social security and welfare highlights are set out below.
JobSeeker, Austudy and Youth Allowance
The Budget increases the base rate for JobSeeker, Austudy and Youth Allowance by $40 per fortnight.
The Budget also lowers the eligibility age threshold for a higher JobSeeker rate for older people on JobSeeker from 60 to 55 years. Around 52,000 eligible recipients will receive an increase in their base rate of payment of $92.10 per fortnight. Payments will also continue to be automatically indexed for inflation, the Budget Papers said.
The Budget increased the maximum rate of Commonwealth Rent Assistance by 15 per cent. The increase will cost the Budget $2.7 billion over 5 years, the largest increase to Commonwealth Rent Assistance in over 3 decades. Around 1.1 million households receive Commonwealth Rent Assistance.
The Budget includes new incentives to encourage build to rent projects by:
- reducing the withholding tax rate for eligible fund payments from managed investment trusts attributed to newly constructed build-to-rent developments from 30 to 15 per cent
- increasing the capital works tax deduction (depreciation) rate from 2½ per cent to 4 per cent per year, increasing the after-tax returns for newly constructed build-to-rent developments
The Government said “industry estimates this could unlock 150,000 rental properties over 10 years, boosting the supply of high-quality, long-term rentals in the Australian market.”
Investment in social and affordable housing
The Government will increase the National Housing Finance and Investment Corporation’s liability cap by $2 billion to a total of $7.5 billion, supporting more lending to community housing providers for social and affordable housing projects.
Home Guarantee Scheme
The eligibility criteria of the Home Guarantee Scheme will be expanded. Eligibility for the First Home Guarantee and Regional First Home Guarantee will be expanded to any 2 eligible borrowers beyond married and de facto couples, and non-first home buyers who have not owned a property in Australia in the preceding 10 years. Australian Permanent Residents, in addition to Australian citizens, will be eligible for the Home Guarantee Scheme.
Aged Care Minister Anika Wells said on 4 May, the Budget would include $11.3 billion over 4 years to fund the outcome of the Fair Work Commission’s 15 per cent pay rise for aged care workers from 1 July 2023.
The cost of delivering aged care will rise by 23 per cent, increasing from $24.8 billion to an estimated $29.6 billion.
The $11.3 billion cost of meeting the 15 per cent wage increase will deliver weekly pay rises ranging from $196.08, or more than $10,000 a year, for a registered nurse, to around $150 a week for cooks, care workers, activity officers and other workers.
Prime Minister Anthony Albanese went to the 2022 election pledging to support a union application for a 25 per cent pay rise for the sector’s 300,000 workers, warning that without a generous increase, the sector would struggle to retain staff, let alone recruit more. He also promised a registered nurse working 24/7 in every nursing home by July 1, this year, but this deadline will not be met.
In February, the Fair Work Commission granted an “interim” wage increase of 15 per cent based on the workers’ increased work value and qualifications. The Government welcomed the decision but urged the increase be paid in two installments – 10 per cent this year and 5 per cent next year – to relieve pressure on the budget. The Commission rejected this.
Ms Wells said registered nurses, enrolled nurses, assistants in nursing, personal care workers, head chefs and cooks, recreational activities officers (lifestyle workers) and home care workers will see an historic increase to their award wages.
Single parent payments
The Budget restores the Single Parenting Payment to eligible single parents until their youngest child turns 14 (currently up to 8 years old). The age threshold was reduced to 8 years by the Gillard Government after previously being reduced from 16 to 12 years by the Howard Government. Single Parents who had not been eligible for the Single Parents Payment had previously been moved to the JobSeeker Payment. The current base rate of Single Parenting Payment is $922.10 per fortnight, compared to the JobSeeker Payment base rate of $745.20 per fortnight.
Around 57,000 single principal carers, including 52,000 women, and around 110,000 children will benefit from the higher rate, the Budget said.
Single parents eligible for the Single Parenting Payment will also benefit from more generous earning arrangements compared to JobSeeker. Eligible single parents with one child will be able to earn an extra $569.10 per fortnight, plus an extra $24.60 per additional child, before their payment stops.
The changes take effect on 1 September. The change will cost the Budget $1.9 billion over 5 years, with 91 per cent of recipients’ women.
Tripling bulk billing incentives
The Budget provides $3.5 billion over 5 years to increase the bulk billing incentive for GPs. The bulk billing incentive will be tripled for the most common consultations for children under the age of 16, pensioners and other Commonwealth concession card holders. Included are face-to-face, telehealth and videoconference consultations.
The Budget said the bulk billing incentive will continue to be higher for patients in regional and rural areas.
New PBS listings
The Budget provides $2.2 billion over 5 years for new and amended listings to the PBS, including treatment for cystic fibrosis. A further $449.4 million is provided for new and amended listings to the National Immunisation Program.
The government said it will scrap the ParentsNext program, ending compulsory mutual obligations for about 100,000 parents who were placed in the program. The program was costed at $484 million over the forward estimates but won’t be scrapped entirely until the existing contracts end in the next financial year. Some mutual obligation requirements will remain.
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