Federal Budget Matters, One month on
Seven Word Summary: Why the Federal Budget matters to business.
On October 25, Treasurer Jim Chalmers delivered Labor’s first budget in almost a decade, outlining a plan to tackle the ongoing cost of living and inflation crisis.
“Why does the Federal Budget matter to me and my business?”
Good question. Here’s our take…
COST OF LIVING
It’s no secret that the global economy is facing significant challenges due to the rise in cost of living and inflation. The latest figures suggest that the inflation rate will peak at above eight per cent by the end of the year here in Australia.
The Federal Budget outlined a five-point plan to tackle cost of living, with a price tag of more than $7 billion. The five-point plan is intended to ease cost of living pressures through:
Cheaper childcare – by subsidising eligible families who earn less than $530,000 a year by up to 90%
Expanding paid parental leave – up to six month’s leave by 2026
Cheaper medicines – saving 3.6 million Australian’s $12.50 per script
More affordable housing – 1 million new homes built over five years
Increasing real wages – increasing hourly age for low-paid workers
Thanks to high commodity prices and strong employment figures, the Budget’s bottom line has a reduced deficit by over $40 billion. This saving has allowed cost of living measures to be implemented, in an effort to ease the burden for families, with the Government so far avoiding drastic measures that would only fuel the inflation crisis.
What about measures for small and medium sized businesses?
ENERGY GRANTS FOR SMALL AND MEDIUM SIZED BUSINESSES
The Government will make $62.6 million available in grants over the next three years to support small and medium sized businesses in managing rising energy costs. The grants will be available for businesses to invest in cost-saving and energy efficient upgrades, putting downward pressure on power bills.
WORKPLACE RELATIONS
One of the most topical and widely debated elements of the Budget is the introduction of new Industrial Relations legislation. The Government aims to deliver a new workplace relations system that is more accessible and fairer, by making it easier for small businesses to reach agreements with their employees and providing bargaining support for small businesses. However, this legislation has faced major scrutiny in Parliament and is yet to be passed, with concerns around the accessibility of strike action.
PAID LEAVE
The Government has introduced legislation to provide up to ten days of paid leave for victims of domestic and family violence. To support businesses in offering these entitlements, $3.4 million has been provided to the Fair Work Ombudsman for advice and support. There are also increases to paid parental leave, with an additional two weeks added each year from July 2024 to July 2026, increasing the overall length by six weeks.
WORKFORCE SKILLS
To address the workforce skills shortage, the Government will establish ‘Jobs and Skills Australia’, a new department designed to strengthen the nation’s workforce and build long-term capacity in the country’s priority sectors.
The permanent Migration Program will be expanded to 195,000 in 2022-23, with 90 per cent targeted to regional areas. In addition, student and secondary training visa holders will have their restrictions eased until June 2023 to allow for additional work. Aged and veteran pensioners will also have their threshold raised by $4,000 to encourage those with skills to work, should they choose to do so.
With the grim backdrop of a spiralling global economy, the 2022-23 Federal Budget attempts to tackle the cost of living and inflation crisis. And once again, we wait with baited breath for the outcomes of the Budget to become actions of the Government, in the hope of an economic recovery in the near future.
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