The Albanese government and Treasurer Jim Chalmers have handed down the Budget for 2023, bringing economic prudence in the wake of the pandemic, and positives for employment and hospitality.
The government expects economic growth to slow from 3.25 per cent this financial year to 1.5 per cent next year, while inflation is also expected to fall, from six per cent this year to 3.25 per cent next year.
Unemployment is expected to stay low at 4.25 per cent for the coming two years.
FY23’s budget is now forecast to be a $4.2 billion surplus.
The coming year’s budget will focus on: relief in the cost-of-living – including power and energy bills, support for small business, investment in health care, more fee-free training through TAFE, and retaining income tax cuts for employees.
Net migration is expected to increase to 400k people this year, up from 184k in 2022, before levelling back to 315k in 2024. Seventy per cent of permanent places will be allocated to skills.
There will be a $76 million investment over two years to assist processing turnaround times for visas, and an increase for Visa Applications of six per cent in addition to CPI, expected to generate an additional $665 million in increased revenue over five years, which will be used toward the improvements.
Pathways to permanency for temporary skilled migrants will also be improved, with restrictions removed for Temporary Skills Shortage subclass 482, through the Employer Nomination Scheme, as well as the limit of one onshore renewal.
Temporary Graduate visa holders with select degrees will get an additional two years of post-study work rights. Restricting international student visa holders to working 24 hours per week has been reintroduced, but this is higher than the pre-pandemic cap.
The Temporary Skilled Migration Income Threshold (TSMIT) will increase to $70k. This is $20k lower than was being sought by unions, and the AHA reports it will be working with government for exemptions in certain areas, such as cooks.
The Child Care Subsidy (CCS) rate will increase, following a $9 billion boost in childcare subsidies. The paid parental leave scheme will undergo changes in coming years, increasing leave by two weeks each year, to a final total of 26 weeks in 2026. Announced last October, the CSS will commence in July, cutting childcare costs for around 1.2 million families.
“This will make it easier for parents and carers, particularly women, to participate in the workforce and work in hospitality,” notes AHA CEO Stephen Ferguson.
Plenty of changes are mooted for industrial relations, skills and training.
Starting in 2026, employers will need to pay superannuation to employees during the pay cycle instead of quarterly, and starting in 2024, those with 100 or more workers will be required to publish gender pay gaps.
Pensioners will have more flexibility to return or stay in the workforce, able to earn up to $11,800 before their pension is reduced or lost, and there is funding for 300k TAFE and vocational education training places to become fee-free.
The announcement also brought references to changes of a different kind to workplace relations, such as minimum standards for gig economy workers and criminalising wage theft. Government has earmarked an additional $50 million over four years for enforcement and compliance activities aimed to counter temporary migrant worker exploitation.
Australia’s 3.8 million small businesses with annual turnover of less than $10 million will be eligible for Small Business Support, which includes continuing the $20k instant write-off for eligible assets. There will also be an additional five tax clinics to help small business with tax compliance and administration.
Recognising the recent BOSCAR data on the increase in cybercrime, there will be further support for small businesses to build resilience to cyber threats.
Three billion dollars in energy relief will come in the form of credits, including up to $650 assistance for energy bills for 1 million eligible small businesses, and a cap on domestic gas prices until 1 July 2025.
And $314 million has been allocated for businesses that invest in clean energy initiatives, which includes efficient electric goods, heating and cooling systems, and installing batteries.
“Small and medium businesses like pubs with a turnover of up to $50 million will be able to claim an additional 20 per cent tax deduction on investments of up to $100,000 in electrification and energy efficiency,” furthered Ferguson.
