Billions of dollars worth of tax offsets, cash payments and fuel excise relief underpins Treasurer Josh Frydenberg’s fourth budget, ahead of the May federal election.
A one-off tax break of $420 will go to more than 10 million Australians earning up to $126,000 a year.
Their total tax relief at the end of this financial year will be bumped up to $1500 for individuals – and up to $3000 for couples – already benefiting from the low to middle income tax offset.
Six million welfare recipients, veterans, pensioners, eligible self-funded retirees and concession card holders will get a $250 cost of living payment in April.
The federal government will also cut the fuel excise in half to 22.1 cents for the next six months, projecting savings of around $30 a week – or $700 in total – for a family with two cars filling up once a week.
The cut will become official from Wednesday but could take up to two weeks to flow through to the bowser.
The competition watchdog will ensure the saving is passed on in fuel by retailers and the government has guaranteed no cuts to roads spending, which is funded by the full 44.2 cents per litre excise.
Mr Frydenberg said the measures announced in the 2022/23 budget on Tuesday night were “temporary, targeted and responsible” and address cost of living pressures.
“Practical measures that will make a difference,” he told federal parliament as he handed down the budget.
Treasury has forecast a budget black hole of $78 billion for 2022/23, before the deficit contracts to $43.1 billion in three years time, as the economy continues to recover from the COVID-19 pandemic.
The jobless rate is set to hover around 3.75 per cent for the next three years.
Tax breaks will also flow through to small businesses that invest in technology and employers who work to upskill their employees.
A small business will get a $120 tax deduction for every $100 they spend on training employees or on digital technologies like cloud computing, e-invoicing, cyber security and web design.
There will also be up to $5000 for new apprentices and $15,000 wage subsidies for employers who take them on.
The Home Guarantee Scheme has also been doubled to 50,000 places a year, meaning first home buyers can buy a home with a deposit of five per cent, or as low as two per cent for single parents.
Almost $18 billion has been put aside for regional infrastructure, agriculture and energy mainly in regions being targeted by the coalition at the election including the NSW Hunter, north and central Queensland, the Northern Territory and the Pilbara.
The package includes $7.4 billion for more dams and water projects, $2 billion for skills and education infrastructure and $1.3 billion for better mobile coverage.
The government has also committed to faster rail projects linking Brisbane and the Sunshine Coast and Sydney to Newcastle.
The budget contains a further $1.3 billion for a package to end violence against women and children.
There will also be new endometriosis clinics and greater access to breast and cervical cancer screening.
The multi-billion dollar cash splash comes alongside a $21 billion improvement in the projected 2022/23 deficit since December, off the back of a stronger labour market and consumer spending.
But the large amount of spending in the budget – much of which was announced before Tuesday – has some economists worried it could cause the annual rate of inflation to balloon and lead to an early hike in interest rates by the central bank.
But the government also expects to save $7.7 billion on JobSeeker payments over four years due to the low unemployment rate.
The treasurer used his budget to praise Australia’s resilience in uncertain times.
“Tonight, as we gather, war rages in Europe. The global pandemic is not over. Devastating floods have battered our communities,” he said.
“Tonight we look to the future. Realistic about the growing threats we face. Ambitious for our country and our children. Optimistic about what can be achieved.”
The federal election could be held as early as May 7.
© AAP 2022
