Australian Federal Budget Insights May 2023

Discover the key measures, financial announcements, challenges and opportunities and what it means for our economy, society and you

Federal Budget 2023-2024

The Federal Budget has been handed down at a pivotal point for our nation’s economy. A “flash” surplus has placed us on strong economic footing yet persistent structural issues remain.

The Budget balances investments in health, cost-of-living relief, and aged care with the need to stimulate productivity without adding to our inflationary pressures.

For our detailed analysis, please read these insights.

Read our tax analysis and insights

PwC's Federal Budget FY23-24 Insights at a glance

A brief return to surplus, with cost-of-living leading the Budget’s agenda

$4.2bn surplus this year, the first in 15 years - but then a return to deficit of $13.9bn next year

3.25% predicted inflation, down from 6% this year

1.5% economic growth expected next year (down from 3.25% this year)

$14.6bn cost-of-living relief package

Energy transition

$1bn

to help provide low‑cost loans for double‑glazing, solar panels and other improvements

$300m

to support upgrades to social housing, co-funded and co-designed with the states and territories to improve energy efficiency

$310m

in tax relief will be delivered via the Small Business Energy Incentive

$2bn

for Hydrogen Headstart, providing revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts

$38.2m

for a Guarantee of Origin scheme, which will certify renewable energy and track and verify emissions from clean energy products – in particular hydrogen

Taxation and reprofiling

$83bn

saved in interest costs over the next 12 years as revenues have improved

$2.4bn

raised from capping tax deductions on large gas producers

growth rate to be set for the National Disability Insurance Scheme by July 2026 to help manage the growth in the scheme

$32.5bn

in budget improvements, including $17.8bn in spending reprioritisations over the 5 years

Defence

20,000

high‑skill, high‑wage jobs are expected over the next 30 years in advanced manufacturing through the historic and vital investment in defence and national security

Environmental

$121m

to establish Environment Protection Australia

$262.3m

to support our Commonwealth national parks

$236m

to establish a national and reliable flood warning system

$231.8m

to advance its strong emergency response capability, in particular for natural disasters

Housing

30% to 15%

reduction in the managed investment trust withholding tax rate for new build-to-rent projects

$2bn

increase in the liability cap for the National Housing Finance and Investment Corporation to support more lending to community housing providers

1 million homes

over 5 years from 2024 remains the commitment of the Housing Accord

Cost of living relief

$14.6bn

cost-of-living relief package to:

provide help with power bills ($3bn in direct energy bill relief)
bring down out‑of‑pocket health costs
support vulnerable Australians
create more affordable housing
boost wages

$1.9bn

to expand the eligibility for the Parenting Payment (Single) to single principal carers with a youngest dependent child aged 8 to under 14 years of age

$40 per fortnight

increase for JobSeeker recipients, plus those on Youth Allowance, Austudy and other income support payments, delivering a $4.9bn boost in support to around 1.1m Australians looking for work, studying or doing apprenticeships

15%

increase in the maximum Commonwealth Rent Assistance

Wellness chapter

$2.2bn

package to address primary healthcare services and commence Medicare reform

$3.5bn

boost that will help GPs provide free consultations to around 11.6 million eligible Australians

$234m

to address the growth in vaping and a campaign to discourage smoking and e-cigarettes

increase per year for 3 years in the excise rate for tobacco products

$2.2bn

increase in funding to provide more access to life changing medicines through the PBS

more of our Urgent Care Clinics will be funded in regional communities and growing suburbs at a cost of $358.5m

Women’s economic security

$590m

to the National Plan to End Violence against Women and Children

$72.4m

to retain and recruit more early childhood educators

Jobs and skills

$11.3bn

to fund a 15% increase in award wages, for more than 250,000 aged care workers

$392m

Industry Growth Program which will offer advice and grants to start-ups and small-to-medium businesses, to help them commercialise their ideas and grow

$445m

to enable doctors, nurses and allied health professionals to cooperate for better care

$286m

investment in our creative sector

$3.7bn

for a revamped 5‑year national skills agreement with the states and territories

$436m

over four years to reform the way the Commonwealth delivers Foundation Skills programs, so more Australians over the age of 15 who need training to improve their literacy, numeracy and digital skills have access

Digital economy and cybersecurity

$46.5m

to support the Government’s announcement on the establishment of a National Cyber Security Coordinator over the next four years to support leadership across the Australian Public Service in the coordination and triaging of action in response to major cyber security incidents

$101m

Investment in the responsible development of Australia’s quantum and artificial intelligence industries

$134.5m

to sustain recent myGov advancements, including the new modernised online platform and recent introduction of the myGov app