After 10 years out of government, Treasurer Jim Chalmers has delivered Labor's first budget since its election victory in May.
Most of the big announcements — both new things the government's funding and things it's getting rid of — are election commitments that we've known about for some months.
But there are a few surprises here and there.
Here's where it plans to spend its money and where it plans to rein things in.
Winner: Families
One of the centrepieces of the government's budget — and its election campaign — is its $4.7 billion spend on child care over the next four years.
The changes will provide more generous subsidies to families and raise the maximum subsidy rate cap to 90 per cent, with a goal of providing universal child care to 90 per cent of all families.
It also announced that from July next year it would start to increase the amount of government Paid Parental Leave to reach a total of 26 weeks by 2026.
The changes will be scaled in from July 2024 and will also allow two-parent households to decide how they split the leave.
The policy comes with a price tag of $530 million.
The government has also announced $12.4 million to promote playgroups and toy libraries, although it's not entirely clear what's involved with promoting them and where around the country that money will go.
There's also $39 million in the budget, to be spent over four years, to increase and improve the consistency of screening programs done on newborns, but most of that money will come from existing resources within the health department.
Another measure that'll be funded through re-directed money from a previous government measure is an increase in the number of stillbirth autopsies.
The government will provide $13.9 million over three years to support bereaved parents.
Loser: The economy
The treasurer had been painting a pretty grim picture for the economy in the immediate future and the budget backed up his comments.
A forecast global downturn, mixed with rising inflation and the pressure on the federal government to provide disaster payments in the wake of the floods, are all going to weigh heavily on the economy.
The budget papers show GDP growth falling by a quarter of a percentage point, to 3.25 per cent, this financial year and then falling again to 1.5 per cent next year.
Thanks to sky-high commodity prices and surging inflation, the budget bottom line will improve by $40 billion.
"Our economy is expected to grow solidly this financial year, by three and a quarter per cent, before slowing to one and a half per cent growth for 2023-24, a full percentage point lower than what was forecast in March," Treasurer Jim Chalmers said.
But, at the end of the day, the broader long-term economic outlook for the budget's bottom line remains gloomy.
Winner: Renewables
The first Labor budget has renewable energy as one of its key priorities.
Like many of the items in the budget, the government has followed through on its commitment to clean energy with $800 million earmarked for a range of projects.
They include previously promised cuts to taxes on electric cars, improving electric vehicle charging network infrastructure and providing community batteries and solar banks.
The budget also includes $500,000 to be spent in the next year to develop a strategy to, in the future, enable the government to support offshore renewable projects in Australian waters.
Neutral: Healthcare
Healthcare is a mixed bag.
On the one hand, Australians will benefit from cheaper medicines.
The government announced $787.1 million over the next four years to reduce the cost of buying medicines on the PBS from $42.50 to $30. That'll kick in from January 1 next year.
People on the autism spectrum will benefit from more than $5 million in funding over 2022-23 for research, early intervention services, and a national autism strategy.
In the wake of the COVID pandemic, more than $3 million will be spent on scoping out an Australian Centre for Disease Control, similar to the US Centers for Disease Control.
Cancer patients are winners too with a massive $450 million for two new comprehensive cancer care centres in Adelaide and Brisbane, and additional funding towards newborn screening and women's health during and after pregnancy.
People living in rural and regional Australia should benefit from the Government's $185.3 million Rural Workforce package, which aims to attract and retain more doctors and allied health professionals to those communities.
But there's still uncertainty over how the government will address Medicare funding.
It's investing $750 million in the Strengthening Medicare Fund, with the Strengthening Medicare Taskforce determining how best to spend to improve access and care for patients.
The Government is investing $235 million to roll out Urgent Care Clinics, to reduce the pressure on public hospitals and improve access to healthcare. But there isn't any additional funding for public hospitals.
Mental health also hasn't received a huge boost with only $24.3 million over four years for more Headspace centres and a boost to preventing suicide in the manufacturing sector.
By medical reporter Sophie Scott and Specialist Reporting Team's Katherine Gregory
Loser: Tax avoiders
While the government ruled out raising income or other taxes, it made clear during the election that multinational tax avoidance would be targeted if it won.
The budget contains an extra $200-million-a-year funding boost to the Australian Taxation Office for the next four years to extend its Tax Avoidance Taskforce.
The government says the extra cash will bring back an estimated $2.8 billion over four years in otherwise unpaid tax.
It's also going to introduce a few new reporting requirements for Australian companies, including the number of subsidiaries they have and where they're registered for tax purposes.
Winner: The Pacific
The government will boost foreign aid to the Pacific by about $900 million over the next four years.
That figure goes further than what it promised during the election by about $375 million.
Australian Federal Police operations in Solomon Islands will get $46 million of that funding, with the money to go towards assisting countries to develop critical infrastructure and provide their own security.
Loser: Mental health
Amid record demand for psychologists and mental health support on the back of the cost-of-living crisis, natural disasters and the ongoing pandemic, the budget has been described by experts as a missed opportunity for mental health.
The sector hasn't received much money, with only $24.3 million over four years for more Headspace centres and a boost to preventing suicide in the manufacturing sector.
But the future of a key program helping millions of Australians seek additional treatment for their mental health remains unclear.
In 2020, the number of Medicare-subsidised psychology sessions increased from 10 to 20. And in this year alone more than 2 million Australians have used the program.
But that's due to end in December, and the budget contains no extra money to extend the program beyond that date.
Psychologists are furious, arguing the move is bitterly disappointing while pointing out the program costs just over 1 per cent of the total annual spend on mental-health-related services.
There is also no extra funding to boost the psychology workforce, with universities losing money for the very postgraduate degrees needed to increase the number of practitioners.
Postgraduate psychology training is currently funded at a lower band compared to other health professions, with the Commonwealth chipping in just over $13,000 per student, compared to more than $27,000 for degrees such as vet science and agriculture.
The federal government is currently only meeting 35 per cent of its psychology workforce target, which is the great shortfall of any mental health profession.
By political reporter Stephanie Dalzell
Winner: NBN
Around 1.5 million Australian homes will get access to fibre to the premises NBN internet, at a cost of $2.4 billion as an equity investment over the next four years.
The pledge is another election promise, with the government estimating the rollout will be done by 2025.
It'll mean people who rely on copper connections at the moment will have the choice to switch to fibre.
Loser: Wages
There's more bad news in the budget for wage earners.
If the cost-of-living crisis hasn't been bad enough, it looks like wage growth won't match inflation until at least next year.
With inflation expected to reach 7.75 per cent in December, workers' pay is expected to continue to go backwards until 2024-25.
In the year to the end of the June quarter, wages grew 2.6 per cent.
But that happened at the same time as a 6.1 per cent jump in the cost of living, according to the Australian Bureau of Statistics' consumer price index from the same period.
There is a sliver of good news: The government says wages are growing faster now than they were before the election.
But that is tempered by rising electricity prices and grocery bills eating into pay packets.
When that inflation moderates, real wages are expected to start growing again in 2024.
Winner: ABC
The government is following through with its pre-election promise to restore $83.7 million over four years in funding to the ABC.
The money was cut by the Coalition government in 2018 and saw the ABC cut 250 jobs.
There is also $500,000 for the ABC to run a feasibility study into expanding double j from digital to FM frequencies.
Both the ABC and SBS will move to five-year funding terms from July next year.
The ABC will also get $32 million to expand content and transmission across the Pacific as the government becomes increasingly anxious about threats to media freedom in the region.
Neutral: Great Barrier Reef
The federal government will spend $1.2 billion on protecting and restoring the Great Barrier Reef. This was an election campaign commitment and was expected, but is now confirmed.
The Great Barrier Reef Authority has been given $253 million in long-term funding to ensure it can maintain its park management programs.
This includes a nine-year expansion of the crown-of-thorns starfish control program.
Almost $100 million will fix gaps in the implementation of the Reef 2050 Long-Term Sustainability Plan, like working with commercial fishers to minimise the impact on protected species.
The Clean Energy Finance Corporation will also invest in projects within the Great Barrier Reef catchment region.
The Great Barrier Reef Aquarium in Townsville will be upgraded to transform the world's largest living coral reef aquarium. This will be used to improve education and awareness.
By political reporter Henry Belot
Loser: Coalition grant programs
Before it was elected, Labor made it very clear it would target some of the previous government's grant programs that it believed were an attempt to win votes and weren't value for money.
Following through on that promise, it's cancelled around $2 billion in grants that were promised by the Coalition.
Some of these projects are from the urban congestion fund and include commuter car parks, road upgrades and rail projects.
The budget also includes changes to $6.5 billion in infrastructure projects over the next decade where a number of projects have had their funding delayed — something known as "re-profiling".
A shortage of workers, rising inflation and a lack of supplies are some of the government's reasons for pushing back the funding timelines.
The government's also scrapped a $250 million regional grants program called the "Building Better Regions Fund".
Labor says it's ditching the program because grants weren't awarded on merit and grants were found to favour National Party electorates.
Instead, it'll create two new regional grants programs, worth a combined $1 billion over three years.
It's also reversing spending set aside in the Safer Communities program.
Winner: Women's safety
$1.7 billion over six years will be going towards women's safety initiatives, including $39.6 million in the next financial year to keep up with increased demand for the Escaping Violence Payment.
There's also funding for the 500 frontline community workers Labor promised during the election and $100 million for crisis and transitional housing options for women and children fleeing violence, along with older women on low incomes at risk of homelessness.
But many advocates are disappointed, saying this spending doesn't go far enough to keep up with the huge demand for services and is nowhere near the annual $1 billion that frontline services say they need.
And there are questions about how the government will achieve its goal of ending violence against women and children within a generation without a substantial increase in funding.
The federal government has committed to working with the states and territories to end violence against women and children within a generation, but we're yet to hear exactly how they'll define that time frame.
Outside of that plan, there's $65.3 million over four years going towards consent and respectful relationships education and $42.5 million over four years to implement Respect@Work recommendations.
That's including $32 million to fund working women's centres around the country to provide advocacy and information to workers facing gender-based issues on the job such as sexual harassment.
On top of that, there's $5.8 million to help support the introduction of a positive duty on employers to do as much to eliminate sexual harassment and discrimination as they can and $2.6 million over the next three years to confidentially document the stories of victims of historical workplace harassment.
Although, it should be noted that budget documents noted Australia's performance on the "gender gap in feeling safe" is worse than the OECD average and is also in decline.
By political reporter Claudia Long
Loser: Law-breakers
As with inflation, fines are set to increase.
Commonwealth penalty units are due to rise from $222 to $275 in the new year.
Fines are calculated based on how many penalty units are handed out for each offence.
Increases will continue to be indexed every 3 years in line with inflation, with the next indexation occurring on 1 July 2023.
"This measure ensures that financial penalties for Commonwealth offences continue to remain effective in deterring unlawful behaviour and contributes to budget repair," according to the budget papers.
The changes are expected to pull in $62.6 million for the government over the 4 years from 2022–23.
Winner: The environment
The environment is a winner in this budget because additional money has been set aside for conservation and clean energy projects.
In this financial year alone, $2.3 billion will be spent on the environment. That's about the same amount spent on skills and workforce development.
Part of the funding for environment and climate change projects is coming from ditched carbon capture and storage or gas infrastructure projects, which were "found to lack a case for government support".
Funding will be restored to some initiatives that were previously cut — like the Environmental Defenders Office and Environmental Justice Australia.
Just over $600 million will be spent protecting threatened species over five years. This is in line with a new Threatened Species Action Plan.
Up to 1,000 Landcare rangers will be trained at a cost of $90 million dollars.
Another $66 million will go towards expanding the Indigenous Protection Areas program. Close to $16 million will go to establishing the Torres Strait Climate Change Centre of Excellence. $7 million will help the public service become carbon neutral by 2030.
As expected, $102 million has been set aside to establish community solar banks, which will improve access to solar power for people usually unable to access it.
Another $224 million will help establish 400 community batteries to reduce reliance on fossil fuels.
These were election commitments.
By political reporter Henry Belot
Loser: Coalition water projects
The government says it will save $4.6 billion over the next 12 years by cutting a bunch of the previous Coalition government's water projects.
The money was identified as part of its audit of previous government spending.
Queensland's Hells Gates Dam project won't be funded.
Almost $900 million in funding will be deferred over the next four years from projects including the Dungowan Dam and Pipeline, Emu Swamp Dam and Pipeline, Hughenden Irrigation Scheme and the Wyangala Dam Wall Raising Project.
The projects will be reconsidered once business cases are completed "and viable pathways to delivery are determined and assessed".
As was indicated before the election, the government will also claw back funding to the tune of $1.173 billion from the National Water Grid Fund.
Some of this funding will be redirected towards the government's other priorities.
Neutral: Aged care
Australia's aged care system will get $2.5 billion over four years to improve the quality of care for residents to pay for the requirement of having a registered nurse onsite 24 hours a day.
However, the measure won't be in place right away, with the budget papers saying the requirement will be in place by July 2023.
Daily care minutes per resident will increase to 215 minutes per day from October 2024.
The government will also provide more than half a billion dollars to implement aged care reform over the next four years. The move is in response to the Royal Commission into Aged Care Quality and Safety.
Among other things, the $540.3 million will go towards information and communication technologies, expanding regional outreach and extending disability support.
The industry's peak body, Aged & Community Care Providers Association, said the budget was an important step along the road to fixing Australia's aged care system — but it suggested more investment was needed.
But advocates may see the funding of registered nurses on site for 24 hours every day and boosting care minutes for residents as a win.
Both were key recommendations of the Aged Care Royal Commission.
Labor initially announced it would spend $1.2 billion if it won the election, but has tagged an extra $204 million to that figure.
Winner: Housing
The government has set a goal of building 1 million new homes over five years from 2024.
The homes are expected to be built under a new national housing accord, which is an agreement between all levels of government, institutional investors and the construction sector.
The government expects there will be around 180,000 housing completions each year in 2022, 2023 and 2024 before the goal kicks in.
But while building 1 million homes in five years sounds ambitious, data shows 985,085 dwellings were completed in the five years to March 2022.
The budget also includes $350 million for the federal government and states and territories to build 10,000 new homes each year.
Winner: Students
If you're a school student, or looking to go to TAFE or university — there's a good chance there'll be something in the budget for you.
Free TAFE is a big-ticket item. Over the next five years, the government will provide $8,721.7 million to provide 480,000 fee-free TAFE places in industries and regions with skills shortages.
Next year alone the government plans to deliver roughly 180,000 fee-free TAFE and vocational education places following the one-year national skills agreement reached at its jobs summit held earlier this year.
The government will also spend $50 million to modernise TAFE facilities across the country over the next two years.
The university sector is also due to get a $485.5 million boost for 20,000 additional Commonwealth-supported places from next year.
The places are for courses in areas of skills shortages and are dedicated to those under-represented in higher education, which include First Nations peoples, those who are the first in their families to attend university and students from remote and regional areas.
Just over $200 million will be set aside for the wellbeing of school children. On average, schools will receive $20,000 which can be used for mental health support, excursions and sporting and social activities.
Another $270.8 million will go towards supporting improvements to ventilation and air quality, as well as larger refurbishments to public schools.
Loser: Irrigators
The federal government has set aside an undisclosed amount to start buying water entitlements from farmers living in the Murray-Darling Basin.
The move is an attempt to return 450 gigalitres to the environment by June 2024. Only 2 gigalitres have been returned so far.
There hasn't been a water buyback in almost a decade and the decision would be highly unpopular with New South Wales and Victorian governments as well as the federal opposition.
Rural communities are also not on board with the proposed policy — they say buybacks can see people and businesses leave towns.
South Australia and the Commonwealth argue the water needs to be returned to the environment, as promised a decade ago, to restore the health of the rivers.
It paves the way for a showdown when water ministers meet in February.
Credits:
- Illustration: Georgina Piper and Emma Machan
- Design: Ben Spraggon and Georgina Piper
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Development: Colin Gourlay and Andrew Kesper
