Designing Australia’s Future
The 2022-23 Federal Budget is reflective of a new period – one reeling from two years of the pandemic and global and domestic crises, against a turbulent political landscape. This Budget addresses the issues top of mind, headlines and agendas including skills shortages, supply chain issues that have tested even the traditionally stable sectors, the rapidly rising cost of living and rising inflation on the horizon.
While all Budgets are important as they set the financial agenda for the year, this particular Budget will also set the Government’s manifesto for the upcoming Election.
And in doing so, it’s hard not to acknowledge the current economic climate which has been like no other.
Speaking to our clients and the business community, there are three common issues each industry is facing: supply chain pressures, workforce management, and the need for increased manufacturing and innovation to continue to support the economy. In this Report we take a deep dive into each of these three areas, and will drill down into the Budget’s spending highlights, taxation implications, and identify priority industries.
The most recent Omicron outbreak reiterated that the future is never going to be what we expected, and as we move into endemic status we must be prepared for a continuous stream of new waves and potentially different strains. As we consider the design for Australia’s future, businesses who succeed will be flexible, support their staff, plan strategically, manage cash flow, and invest in technologies to deal with any potential challenges we may be faced with.
This year’s Federal Budget key spending
- $15b national reconstruction fund – partnering with the private sector and superannuation funds – for investments in modern manufacturing, innovation and technology projects.
- $6.2b to increase rebates for childcare and remove salary caps, with a goal of subsidising 90 per cent of the cost of childcare for all families, regardless of income.
- $2.5b aged care package to fix aged care 'crisis' and overhaul the sector.
- $1.1b to boost Australia’s technology industry making 465,000 TAFE places free, adding 20,000 university places, and pledging to reach 1.2m technology jobs by 2030.
- $8.6b cost of living measures including the 22.1c/litre petrol excise cut, $420 tax offset for low and middle income earners, and $250 bonus for pensioners and welfare recipients.
This year’s key spending – a snapshot
- $38b to increase the total Defence workforce by 18,500 personnel by 2040
- $17.9b committed to road, rail and community infrastructure
- $9.9b over 10 years to deliver a Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers (REDSPICE) package, doubling the size of the Australian Signals Directorate
- $8.9b National Water Grid Fund
- $6b on disaster relief and recovery
- $6b in COVID-19 health support including the Winter Response Plan
- $4.1b over 4 years for the $420 cost of living payment for low and middle income earners
- $2.4b over 5 years for new and amended listings to the PBS