Federal budget: The winners and losers
By James Massola
Winners
Aged care
Gets a package worth $17.7 billion over five years, rather than the usual four, in response to the Aged Care Royal Commission’s shocking findings of abuse and neglect.
Budget winners include families and infrastructure. The environment is a loser.Credit:SMH/The Age
The measures include $6.5 billion for an extra 80,000 home care packages over two years to help more people stay in their homes for longer. There’s also $3.2 billion to cover a $10 per person, per day increase in payment to aged care providers and $3.9 billion to increase the number of “care minutes” each aged care resident receives.
Taxpayers
Tax relief for 10.2 million people will be delivered through a $7.8 billion extension to the low and middle-income tax offset (LAMITO). This is worth a maximum of $1080 for individuals and $2160 for couples. Maximum benefits will flow to people earning between $48,000 and $90,000 per year. The measure is expected to generate about $4.5 billion in economic activity in 2022-23.
The government’s Low and Middle Income Tax Offset (LAMITO) has been extended again.Credit:
Infrastructure
$15.2 billion in new funding over 10 years for infrastructure projects nationally. The spending is designed to support an extra 30,000 jobs, directly and indirectly.
$3.3 billion package for NSW includes $2 billion for upgrades to the Great Western Highway between Katoomba and Lithgow; $500 million for Princes Highway upgrades and $548.5 million for road safety and community infrastructure projects.
Families
Families with two or more kids in childcare will have their costs slashed thanks to $1.7 billion over five years.
The annual subsidy cap of $10,560 for families earning $189,390 or more will also be removed. These measures are designed to encourage both parents back into full-time work by removing the disincentive of high childcare costs. There’s also $1.6 billion for preschool over four years.
Women
Altogether women get $3.4 billion. An additional $1.1 billion will be spent on women’s safety measures, including $261.4 million over two years in a new deal with the states to boost frontline family, domestic and sexual violence services. There’s also $164.8 million in financial assistance for women affected by family violence and $57.6 million for Aboriginal and Torres Strait Islander communities. And $351.6 million will be spent on new medicines to fight breast and lung cancer, osteoporosis and for women’s health initiatives that cover maternal, sexual and reproductive health.
Mental health
A $2.3 billion, four-year package for suicide prevention and mental health, which includes $487 million for adult mental health services, $278 million for people aged 12 to 25 and $100 million for early intervention programs for under-12s.
Downsizers
People over 60 who sell their family home and downsize will be able to put $300,000 into their superannuation.
Entrepreneurs
A new “patent box” will let people who make money from new patents developed in Australia be taxed at 17 per cent – a little more than half the company tax rate.
Losers
Future generations
Australia’s strong health and economic response to COVID-19 has come at an eye-watering cost. The 2020-21 deficit has been revised down by $52.7 billion to $161 billion, while forecast deficits in the three years from 2021-22 have been cumulatively revised down another $29.4 billion - but still add up to $285.4 billion. The underlying cash balance is projected to improve to 1.3 per cent of GDP by 2031 – but there isn’t a surplus in sight.
Tourism
Businesses depending on international visitors will begin to see international tourists return from the start of 2022 and the government has spent up to encourage domestic tourism. But Treasury warns inbound and outbound tourism will remain low until at least the middle of 2022 because of the pandemic.
Environment and climate change
There’s $100 million to protect ocean life, $209.7 million for an Australian Climate Service to prepare for extreme weather events and $1.2 billion over 10 years to encourage investment in regional hydrogen hubs, and in carbon capture and storage technology. Compared to Australia’s allies and partners, it isn’t much.
The National Archives
Australia’s collective memory is a big loser in this budget. The institution needed $67.7 million to save only the most urgent and at-risk materials, such as some of the speeches of wartime prime minister John Curtin. It got not one cent beyond a minuscule operating increase of $700,000.
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James Massola is political correspondent for the Sun-Herald and Sunday Age. He was previously south-east Asia correspondent in Jakarta and chief political correspondent. Before that he was political correspondent for the Australian Financial Review.