Supporting the recovery
The main themes of Tuesday’s budget was job creation and continued support of economic growth – with an overall goal of reaching an unemployment rate of below 5%.
The Government plans to do this via a raft of infrastructure, business and individual spending packages, along with targeted spending on some specific demographics such as aged care, disability and women.
Funding has been provided for the aged care industry to start the management of matters arising from the Royal Commission. Of the almost $18 billion earmarked for aged care, a large proportion is expected to be spent on the workforce, including the number of aged care workers and increased training and support.
The NDIS has been additionally funded to the tune of approximately $13 billion. There was also a Women’s Budget Statement allocating $3.4 billion to improve the economic security and status of women in Australia. There will also be significant funds directed to mental health.
The level of spending announced is expected to result in Australia staying in deficit for at least the next 5 years, with net debt approaching $1 trillion.
Importantly, it is expected that the international borders will remain closed until mid-2022, an assumption which underpins the estimates. Other assumptions made in the budget estimates are widely thought to be conservative which may result in better than expected numbers in the future.
It is widely anticipated this will be the last budget before the next Federal election which puts some of the announced spending into context. Many of the measures announced will not come into effect until after 1 July 2022 or 1 July 2023 – under the administration of the next government.