The Household Energy Upgrades Fund is a welcome initiative that acknowledges that poor thermal quality of dwellings and inefficient appliances are key drivers of energy bill stress. The initiative will provide much needed relief for low-income households who are spending a disproportionately large percentage of their income on energy.  However, research indicates that targeting the initiative at low wealth – rather than low income - households may have been a more equitable approach.

Low-income refers to inequality of salaries whereas low-wealth expresses inequality in net worth. Wealth refers to financial assets like savings or property that can be used to ease unexpected financial difficulties or finance unusual expenses like retrofits. Two thirds of low-income households are in the middle or high wealth groups and may have access to financial resources beyond disposable income. However, low-wealth households lack such reserves.

Targeting low-wealth rather than low-income households is supported by research on the distribution of solar panels. Solar panels can mitigate energy-related financial stress, yet the uptake of solar panels is occurring unequally with Australia’s least wealthy households experiencing persistent disadvantage.

The design of the Household Energy Upgrades Fund is also leaving behind private renters. Renters are more likely to struggle with energy bills than owner occupiers. Renters tend to live in less energy efficient homes than owner-occupiers. Renters may also be missing out on draught proofing and lighting upgrade subsidies, and in 2019-2020, only 6 per cent renters had access to free electricity from solar photovoltaic panels compared to 30 per cent of owner occupiers. Targeting retrofits at social housing renters is a welcome step, however, the scheme entrenches the disadvantage of private renters.

After years of being at the receiving end of attacks on higher education values (real or perceived), the HE sector can be quietly pleased with the injection of some modest resources in Jim Chalmers’ first end-to-end Federal Budget. These will expand student places, although how equitably for under-represented future students remains to be seen. 

It will also support the very considerable uptick in technical capabilities if Australia is to become a partner of equals in the AUKUS defence treaty with the UK and US. The scale of the latter should not be under-estimated and if the sector plays it cards astutely, there is genuine room to upgrade the nation's high-tech capacity, and its future economic sophistication, as a useful by-product.

The Federal Government announced $101 million over five years in a new critical technologies package. This funding will enable investment in a new Critical Technologies Challenge Program and a new Australian Centre for Quantum Growth.

The Critical Technologies Challenge Program will offer grants for Australia’s quantum industry to partner with wider industry to prototype new uses of quantum technologies. The new Australian Centre for Quantum Growth will have a focus on connecting researchers with industry and include education and advocacy objectives.

This is a great start, but the quantum technologies sector will need further funding – beyond what has been announced in this budget. More will be needed to solve some of the challenges identified in the National Quantum strategy, like accessing infrastructure, commercialising products and meeting the sector’s growing quantum skills needs.

The electrification assistance to small business will certainly assist in decarbonisation and lowering the use of gas. However, the real heavy lifting is still yet to come. Australia will have to expand state-based schemes such as Victoria's electrification of households to really have an effect on gas consumption. The assistance for households will have to go further to have a significant impact on our reliance on gas for heating and cooking. Households will have to provide further assistance to disconnect from the gas grid.

The only way we can decarbonise households will be to abandon natural gas and to electrify all of our energy use. The creation of renewable energy zones across Australia will need to have a centrally planned Commonwealth-led initiative to drive up renewable energy deployment and to further our need for a secure energy supply. Australia has still yet to fully address its need for a secure energy supply.

There were zero mentions of schools, teachers, or universities in the 30-minute Federal Budget speech made by Treasurer Dr Jim Chalmers Tuesday night. This set the trend for a disappointing 2023-24 Federal Budget for the education sector, in which Chalmers refused to fund education in a way that makes it a defining policy for the Albanese Government.

The Labor Government will argue that there are currently ongoing national reviews throughout this year into Early Childhood Education, School Education, Teacher Education [again] and the Higher Education sector and that before any large-scale funding reform can begin, these processes will need to be completed. We ask: can overworked and under resourced staff across these sectors really wait that long for support?”

The 15% increase in the maximum rate of Commonwealth Rent Assistance is a welcome measure given how unaffordable the rental market has become. On the one hand, the measure alone may not be sufficient to make a meaningful dent in rental stress. On the other hand, it may add to inflationary pressures. The concern is that planned increases in the supply of affordable and social housing will not become available quickly enough to combat the surging demand for housing as migration numbers spike.

The increase in bulk-billing incentives for GPs is a sensible strategy to address the declining rates in bulk-billing across the community. The increase, which is estimated to cost $3.5 billion over five years is large enough to have a significant impact on bulk-billing for those under 16, pensioners and people holding a concession card - three groups which tend to require more primary care services than the general population, while also typically having lower income.

However, whether the policy change is enough to counter the trend towards lower bulk-billing caused by the rebates for these Medicare items not keeping up with the cost of providing these services remains uncertain. The additional funding for Urgent Care Clinics is similarly welcome. They have the potential to take some of the strain from our under-pressure hospital emergency departments and allow faster care for those with urgent but non-life threatening issues.

A key question is how they can be marketed to the community to make them an attractive option. The change in medication policy, allowing purchase of two months’ supply (rather than one) for a common range of medication, is likely to represent good strategy, saving money to the government while providing increased convenience to patients and carers. It will be important however to monitor for medication shortages and amend the policy if and when these occur.

Having over $230 million dollars allocated to tobacco and vaping is a genuine package, with $140 million to tackle Indigenous smoking, $63 million for a broad-based education campaigns and $30 million towards cessation. The Federal Government plans to work with states and territories to tackle smoking and vaping, which is heartening.

Any measures to relieve cost of living pressures will be a positive for households struggling to meet mortgage or rent payments. While the 15% increase to Commonwealth Rent Assistance is welcome, it barely covers the rent increases of the last 12 months in WA. CRA needs to be overhauled to be more equitable and make a real dent in the cost of renting.\\

The incentives to help the delivery of build to rent housing are positive and has the potential to increase supply in the private rental market and deliver long term, secure rental housing. In addition, the increase in funding for homelessness services is desperately needed in a sector under tremendous pressure.

The new Budget proposes a common-sense commitment to save energy in 170,000 social houses and 380 million SMEs, $1 billion for green financing to help double glazing and solar panels, a Net Zero Authority to help regional industries switch from coal and gas to renewables, and a fund to help precincts in cities become net zero.

The biggest surprise was the creativity projects that recognise the major heavy lifting for the next economy will come from the private sector and that government needs to be an enabler. These include things such as attracting global green investors through strong corporate climate disclosure statements and resourcing ASIC to target greenwashing; a Guarantee of Origin Scheme that enables full traceability in the credentials of green metals, hydrogen and other products; and Hydrogen Headstart, which calls for a big competition to see the best two or three projects to make regional hydrogen real and fully linked to Indigenous communities.

These indicate to me a much more mature kind of leadership that I don’t remember in previous governments of any persuasion and help me feel as though the almost impossible climate goals may just be within reach.

Overall, I feel the investments in health, gender equality and women’s safety in this year’s Federal budget are a positive. The investment in Medicare, support for cheaper medicines, more access to urgent care clinics and easier access to pharmacy care will help improve the quality of life for many Australian’s in what has been a challenging few years for health care.

In particular, the tripling of the bulk billing incentive - the largest ever increase in the history of Medicare - will help GPs provide free consultations to over 11 million Australians. The additional funding for women’s safety is also a welcome move, but it still falls short of the resources experts said is needed to meet the new National Plan for Women’s Safety, and it risks many women being left vulnerable without the support they need to be safe and recover from violence.

The end of the ParentsNext program is recognition of the essential work performed by single mums and the expansion of eligibility for Parenting Payment is also welcomed.”

The proposed parameters of the 2023-24 defence budget highlights the challenges of the ongoing ambitious modernisation of the ADF’s key fighting and support arms as well as the potential risks associated with managing the cost of long-term strategic projects such the acquisition of nuclear-powered submarines.

This budget has not taken the opportunity to offer an alternative plan to the stage 3 tax cuts. Under the current settings, low-middle income earners will not receive the Low Middle Tax Offset of up to $1,500 that has been in their tax refunds since 2018, while the stage 3 tax cuts that will favour people earning more than $120,000 will still commence from 1 July 2024, at a cost of $69 billion over the next four years.

Income tax rates need to be redesigned to address bracket creep more equitably across all income ranges. The plan to ensure that superannuation is remitted to superannuation funds when the worker is paid will help to address the shortfall in superannuation payments. This will be supported with additional compliance resources for the ATO to monitor compliance by employers.

It’s a constrained budget, but within those constraints, the Treasurer has gone about as far as he dares. The Treasurer has had to deal with pressure from cost-of-living relief, while also balancing public finances that are precarious. We have a small surplus in 2022-23, but a return for deficits for the three subsequent years. This is the principal reason for the constraints seen in the budget.

The cost-of-living measures are a step in the right direction but will not compensate for the full impact of cost-of-living increases. The increase in Commonwealth Rent Assistance won’t come close to covering the real increases in rents that people have experienced over the past two years. The extra relief for energy bills ($500 for households and $650 for small businesses) is a welcome measure.

The forecast for price inflation to slow from 6 per cent this year to 3.25 per cent in 2024 is ambitious – I think there’s a long way to go to get price inflation down to that level within a year. The Treasurer had to walk a bit of a tightrope between providing support for rising costs of living on the one hand, and – at least according to commentators – not fuelling inflation on the other hand. I think he’s delivered a reasonable budget under the constraints he’s facing - and as much as he dares given caution over the future. I think the Treasurer is also cautious because of the effect that committing too much spending would have on Australia’s public finances.

Undoubtedly Australia needs massive public infrastructure investments. While it is well accepted that infrastructure investment can support economic recovery from the pandemic, future growth and improved living standards are also key considerations.

I welcome the approach announced in latest Albanese Government federal budget to conduct an independent review of the Infrastructure Investment Program to ensure the planned $120 billion investment over 10 years is made in nationally significant projects and bring clarity and more certainty to the extensive backlog of projects requiring funding and resource allocation. As we know in recent years planning of new infrastructure projects expanded significantly and it is required to ensure necessary funding and resources are available to complete them within a reasonable timeframe and considering the future population growth and climate change effects.

It is very important to highlight that the infrastructure sector is facing significant shortages of skilled workers and materials. For example, the recent independent review on the delivery of Inland Rail by Kerry Schott AO revealed that one of the factors contributing to delays in the project has been supply chain challenges related to construction materials. To address issues like that, the government should facilitate embracing new ideas, technologies, and innovations, while streamlining approval processes, such as environmental approvals, to better suit each project's unique characteristics and requirements. The federal government ought to connect the national innovation and science agenda with upcoming infrastructure investments, enabling the proposal and implementation of intelligent ideas and cutting-edge technologies. By doing so, they can decrease construction and maintenance expenses for transport infrastructure, ensuring the viability of these projects.

Expressing the commitment of the federal government to Vision Zero, with the goal of eliminating deaths and serious injuries from road crashes by 2050, is very motivating. For example, post the floods in February to April 2022 in NSW, in excess of 4500 potholes appeared across Greater Sydney, while tens of thousands of potholes appeared across the country roads. Potholes on roads are a major safety concern of drivers and passengers and the longevity of vehicles. Funding allocation for various programs such as National Road Safety Action Grants Program and Black Spot Program are of significant importance for safety of our road users.

The federal government needs to collaborate with state governments and communities to ensure both short term and long-term concerns are addressed, and considering various natural hazards from flood to bush fire to climate change our transport infrastructure and network are resilient. Specifically, it is crucial to consider the effects of climate change on the operations and resilience of these planned infrastructure, as these factors can significantly impact the long-term viability and success. Indeed, the Commonwealth and state governments ought to integrate their climate change objectives and initiatives with infrastructure investments.

The budget is good news for many South Australians delivering improvements for two significant groups: pensioners and those household relying on government allowances. For nearly 30% of SA Households the government is their primary source of income, compared with just over 22% for Australia overall. And for the SME State, the 20% tax reduction for small businesses who engage in energy efficiency is good news.

It remains to be seen, but the cost-of-living relief might not be a deal-breaker for inflation. It will depend on how much the additional payments put pressure on prices. But given this money will likely go to food (already a volatile item whose price increases have been largely determined by forces outside Australia) and clothing (which saw a 2.6% decline in prices last quarter) and rent (which will be somewhat offset by increases in rental support) it may not be as much of an influential factor as some are saying.

Finally, the money being spent to strengthen Medicare and Age Care workers will help the State’s large health sector. This sector accounts for almost 18% of employment in the State, the largest sectoral employer.

"Following the announcement of $91 million over 2 years for the initial set-up of an Australian CDC it is important to revisit some of the guiding principles to ensure its success.

These include:

1) the need for a national CDC to be led from Canberra utilising a ‘hub and spoke’ model to ensure broad jurisdictional buy in

2) to coordinate national disease surveillance and strategy, with sufficient independence to provide robust evidence-based policy advice

3) to focus on the optimal collection, linkage and use of data as an initial priority

4) to support laboratory capacity in each jurisdiction, including advanced pathogen genomics where appropriate

5) to start with infectious diseases as a post-pandemic focus, incorporation pressing non-communicable disease priorities as well, but being careful not to grow too quickly.

 It is important to revisit these principles and to take a long-term view when considering how the money will be allocated.

Families with young children, particularly those living on low incomes, have a number of small but significant Budget gains. Easier access to childcare, boosts to Rent Assistance, Jobseeker and Single Parent Payments, alongside better access to medical bulk-billing, cheaper medicines and smaller utility bills should hopefully add up to more security for low income families. The increased spending on domestic violence services and other community based services will also better support women’s safety and assistance with family support. Those working in low income sectors, where women dominate, such as aged care and early childhood will also benefit from wage increases and reductions in training costs.

The direct address to the needs of those who provide or receive care, those without incomes from paid work and those who are among the 40 percent exposed to violence in relationships, is unusual in recent history. Australians have become used to governments directing public money to the private sector via industry subsidies, business bonuses and tax discounts, leaving behind those without jobs, homes, safety and affordable health care. More is needed, but the Budget is a positive step towards reducing social inequality and exclusion.

We note the Federal Government’s priority to address cost of living pressures in this Budget and welcome measures that target health inequities by providing better access to healthcare, for instance through investments in Medicare, bulk billing, mental health, aged care and Aboriginal and Torres Strait Islander health and wellbeing.
 
We recognise the Government’s continued support of health and medical sciences through schemes such as the National Health and Medical Research Council and Medical Research Future Fund. Funding for research and innovation is vital to improving healthcare, although we are concerned that the NHMRC research budget continues to drop in real terms. Research is the beginning of a pipeline that ultimately leads to better patient outcomes: research findings inform best practice, contribute to new treatments and therapies, and lead to cost-saving innovations. Additional investment to better embed research and innovation in the health system would further drive efficiencies and in the long-term would help bring about the health benefits Government is seeking.

Investment in multicultural health was a welcome feature of the budget including $4 million in multicultural media to communicate health messages. But communication alone does not address the vast range of barriers faced in accessing and using healthcare services to improve health outcomes via prevention and timely and effective treatment.

Translation and interpretation services are a critical tool that has been acknowledged, with a focus on primary care and mental health access. Yet CALD communities include a diverse population, with a complex range of factors influencing their ability to access care, with factors such as digital literacy, social inclusion and socio economic issues playing a critical role in health outcomes. Targeting language alone does not  address these drivers of poor and inequitable health.

Some welcome but limited developments in the Federal Budget for mental health and wellbeing. Providing additional supports for some of Australia’s most disadvantaged populations through various cost-of-living, welfare, housing and medical and pharmaceutical cost initiatives are important measures to support the ‘mental wealth’ of our nation.

Some of the other important changes to Medicare, particularly to support bulk-billing of the most disadvantaged and supports for increased digitisation of health care delivery are critical for better mental health care. The specific support for developing the mental health workforce by increasing funding for universities to train post-graduate psychologists and provide additional supervision and clinical placements is most welcome. It’s a down-payment on moves towards more substantial mental health reforms later this year.

The 2023 budget includes a range of measures that provide immediate and crucial relief to households and businesses facing inflation that has increased by over 12 percent in the last two years, with electricity and gas prices rising by a staggering 34 percent. While some of these measures will have a one-off impact, others will have a more permanent effect, albeit modest. Additionally, energy-transition measures will assist with cost-of-living pressures, but their impact may not be immediate.

The debate about whether these cost-of-living relief measures will worsen inflation is misguided. Electricity rebates or increases in JobSeeker are inflationary in the same way that wage increases are. However, no one suggests that we should not increase wages to alleviate inflation. We should also dismiss the idea that we should not help those who are most disadvantaged in society to avoid putting pressure on inflation.

Instead, the government should either wait for supply responses and for the impact of higher interest rates to subdue inflation or reduce expenses and raise taxes elsewhere. The budget made a timid attempt at the latter.

The adjustment to the single-parenting payment cut-off is a small step in the right direction for Australian economic policy.  Single mothers are a disproportionately disadvantaged segment of the population, and their financial positions are likely to have been further eroded by the recent cost-of-living crisis. The adjustment will incrementally improve the welfare of these parents and their families. 

Research tells us that growing up poor severely limits economic opportunities of children, and that limited economic opportunity leads to wasted human talent and potential.  Further, poverty and disadvantage are known to be strong determinants of downstream social problems.  Policies that address these issues at their root are therefore valuable investments in Australia’s future.

Domestic tax revenue is almost $700b per year, so the projected cost of the program ($1.9b over four years) is relatively modest.   Australia's relative poverty rate and degree of income inequality are moderate by international standards, but policies such as this will put downward pressure on both.

A women's budget! 

A budget investing in women is one investing in the long term of Australia’s future workforce. By increasing support for women and the most disadvantaged by:
•   Extending sole parent payments until youngest child is 14 years
•   Tripling support for bulk billing
•   Increasing funding to end violence against women
•   Lifting rent assistance by 15% ($31 per fortnight)
•   Allocating $3 billion to power bill relief (25% less for electricity bills and 16% less for gas)
•   Lifting Jobseeker, Austudy and youth allowance by $40 per fortnight
•   Lifting Jobseeker payment rates further for those over 55 years (majority are women)
•   Investing $3.7 billion in a 5-year national skills agreement - with an Australian Skills Guarantee focusing on increasing women in trades and skills training
•   Extensive support for aged-care workers, wages & skills development (majority are women)

This budget is investing in ways that see welfare as a bridge to an active future for women and the most disadvantaged. The proposed new $200 million allocation for place-based partnerships that work to arrest intergenerational disadvantage has the potential to assist poorer localities including regions. Leveraging local partnerships is part of what regional communities do best.

The relief for small business through the increase in asset write off as well as energy efficiency incentives will also assist regional economies. The centrepiece budget vision of Australia as a renewable energy superpower (with $40 billion set to be invested in green initiatives) also focuses strongly on regions as drivers for the growth of hydrogen power production. Specific mention of Whyalla was made in this budget’s transformative energy vision which, if realised, will be a major boost for SA and the whole of the Spencer Gulf region.  

The $1.9 million for Indigenous Australians in Central Australia will also have an impact on regional SA given the mobility and family links across the Northwest of the state - from Yalata to Maralinga and through to the APY Lands and Alice Springs in the NT.

Australia is going through a housing crisis. Buying a new home is out of reach for many low-income Australians. Pressure is rising for tenants, with many families financially and psychologically stressed by the all too real possibility of not being able to pay the rent. 

However, you can’t read much about it in the Federal Budget. All you will find is an extra $2.7 billion to the Commonwealth Rent Assistance program, the encouragement of built-to-rent projects, an increase in the National Housing Finance and Investment Corporation's liability cap, and the expansion of the Home Guarantee Scheme.  

A lot more must be done to increase supply. The solution to housing affordability is a long-term journey where government, industry, and communities work together to redefine the Great Australian Dream from large detached suburban homes to affordable units in urban centres. 

Density must increase, especially around mass-transit arteries. Builders must be supported, with those willing to build houses for lower-income households finding the conditions to thrive. Construction methods must be updated to reduce the reliance on individual labor. To further alleviate labor shortages, more training and skilled immigration is needed.  

Without coordinated action to accelerate supply, Government budgets will continue to be financially sound but with little practical effect on house affordability in Australia.

Tonight’s budget includes some welcome investments to help address Australia’s teacher workforce crisis. There is $25 million for pilot programs to work out how we can make more time for teachers to do their job and $10 million for a communications campaign to celebrate how great they are when they get the chance. This funding provides important recognition of the current challenges faced by Australia’s teachers. However, these elements of the National Teacher Workforce Action plan tinker at the edges of a much bigger problem: an education policy framework that has concentrated attention on narrow performance measures, leading to intensification of teachers work and encouraging a lack of trust in the profession. Addressing this problem will require bold rethinking of our national schooling policy.

"The initiatives around skills study and apprenticeships are welcome. In an economy with near full employment but facing the kinds of transformation that AI is bringing, young people need a renewed emphasis on skill development. What we need to see is the translation of these initiatives and the ‘joined up workforce strategy’ of the previous government to really take shape. The National Careers Institute, for example, is an excellent initiative that has brought together a great evidence base on how we can assist young peoples’ career development. These approaches based on current best evidence, however, have been slow to translate into schools. So it will be really important that the different players are brought together around these workforce and skills challenges. 

The emphasis that the AUKUS plan brings to high skill jobs also presents some real challenges in the ‘pipeline’. For decades now, Australian education policy has been driven by an emphasis on ‘basic skills’ like those assessed in NAPLAN. It is far from clear, however, that lifting basic skills translates into the kind of increase to the high-skills workforce the government is looking for here. There will be a need to improve the pathways for the development of the kinds of complex capacities the OECD has been forecasting for some years now. This need is not currently addressed in the existing workforce strategy work nor is it apparent in the budget announcements." 

The Australian Academy of Science welcomes the Albanese Government’s ongoing support for science and research in the 2023-24 Federal Budget.

This is a ‘business as usual’ Budget for science, continuing to invest in Australian universities, science agencies, national research infrastructure, training scientists, supporting business research and development (R&D) and the broader science system. Despite this spending, Australia’s overall investment in science remains lamentable. Figures released in late April show that the Australian Government’s investment in science, research and innovation is the lowest on record at 0.49% of GDP.

Reversing the downward trend of Government investment in R&D is not the work of any single budget. It will take a decade or more of commitment and effort from government, industry and the higher education sector. Work must start today.

The Academy was disappointed to see that the Australian Government’s flagship initiative to invest in international collaboration, the Global Science and Technology Diplomacy Fund, has been earmarked for reductions over the forward estimates.

Acknowledging that there is ongoing work within the government to modernise policy settings for the science system, Australia still lacks a whole of government and society plan to improve Australia’s lamentable level of research and development investment.

The Academy has recommended two key actions with which we can get started –formalising policy to get a national target to lift R&D from 1.79% to 3% and an independent review of the entire science and research system.

The budget makes worthwhile investments in recognition of the value that science brings to the nation – economically, socially, and culturally – including:

• $4.5 billion in science and research through universities in 2023/24 and $3.3 billion to support Research and Development in industry.
• More than $3.5 billion in the science agencies like the CSIRO, including welcome ongoing funding for the Australian Institute of Marine Science (AIMS) and Questacon: Australia’s science museum.
• Funding to establish Environment Protection Australia, Environment Information Australia, review the Murray Darling basin plan and reform our failing environmental laws.
• Other necessary investments in science advice through the National Science and Technology Council, supporting the National Reconstruction Fund, Quantum science and responsible artificial intelligence.

The Academy looks forward to working with government to create a fit-for-purpose research enterprise able to support and advance science in Australia and to support our economy.

The 2023–24 Federal Budget contains some welcome measures for science and technology but falls short on the strategy and investment critically needed to grow wealth and wellbeing by making Australia a global leader in research and innovation.  

Time is of the essence for Australia to grow as a leading innovation nation, rapidly decarbonise our economy and become a global renewable energy powerhouse.  

Innovation is the life-blood of economic, social, health and environmental progress. We have a timebound opportunity to bring together Australia’s ingenuity and abundant natural assets to truly leverage our renewable energy advantage. 

The figures released in April have shown a continued decline in research and development (R&D) spending with total government spending on R&D reaching a low of 0.49%. This will drag us well below the OECD average of 2.67% of GDP and falls well behind world leaders in research such as the United States, Germany and Japan who all spend more than 3% of their GDP on R&D. 

The Australian Research Council and the Universities Accord Reviews have shown that Australian research is in crisis and our potential to lead the world in renewable energy is being left largely untapped.  

We have abundant critical mineral wealth, we have exceptional leaders in research and innovation, and we have the chance to bring these together through advanced manufacturing to lead the world - but it requires vision, infrastructure and backing.  In next year’s budget, we hope to see a commitment to lifting research funding to international competitive levels.

ATSE welcomes the new $392.4 million Industry Growth Fund which will provide an important partner fund with the Australian Economic Accelerator. This will continue to build a positive commercialisation environment and lead to more of Australia’s world class research becoming world class innovations. 

The Academy is disappointed in the $25 million reduction from the Global Science and Technology Diplomacy Fund. Research is a cooperative endeavour and Australia needs to take a leading role in working with its regional partners in creating global solutions.  While other nations are increasing investment in international research collaboration, Australia’s leadership is more important than ever in the face of challenges such as climate change, food insecurity and emerging health crises.  

We also welcome the creation of a National Net Zero Authority to support workers and industry through Australia’s clean energy transition. There are welcome steps in the budget such as the Transport and Infrastructure Net Zero Roadmap. However, decarbonising the economy must be stepped up if we are to meet and beat Australia’s climate commitments.

A series of strategic investments in frontier technologies, quality science advice, and growing new science-driven businesses in advanced manufacturing are welcome initiatives in tonight’s Budget.

These investments, coupled with an array of thoughtful major reviews underway, are steadily designing a blueprint for the Government to deliver its 2022 election pledge to deepen R&D investment to tackle Australia’s major economic challenges.

They lay the first building blocks on pledges by Prime Minister Anthony Albanese, Deputy Prime Minister Richard Marles, and Industry & Science Minister Ed Husic to ramp up investments in science.

The 2023 Budget lays the foundations for a clever, strategic build-up of Australia’s investments in science in coming years. 

It starts to roll out National Reconstruction Fund investments and the new Quantum Strategy with smart, deliberate funding to scale up promising early-stage science and tech industries.

It highlights how the Government is leveraging its major reviews to inform its strategy, then investing where the expert advice sees the most potential for Australia.

Over the next year, major reviews will shape the next phase of the strategy for the Government to start to dramatically escalate public investment in R&D to generate new breakthroughs, grow our STEM-skilled workforce, and secure Australia’s future economic prosperity.

We’re delighted to see investments in quality science advice, science leadership, and the crucial forging of ties between the worlds of science and policymakers through STA’s Science Meets Parliament.

The Australian federal budget, delivered tonight by Treasurer Jim Chalmers, is by no means a ‘climate budget’. The focus was squarely on relief from immediate cost of living pressures but with an eye to 'setting our country up for a better future', including through embracing clean energy and looking to establish Australia as a global renewable energy 'superpower'. For us here at Melbourne Climate Futures, the Treasurer’s budget speech contained a number of notable announcements of importance for climate action, including:

*    Small business energy bill relief, $314 million to help up to 3.8 million small and medium-sized businesses save on energy bills through greater tax deductions for spending that support more efficient use of energy.
*    a $2bn Hydrogen headstart program to help Australia and Australian industry become a leader in producing and exporting hydrogen power
*    an additional $4bn of renewable energy investment
*    $1.9bn to strengthening Australia’s relationships in the Pacific.

These initiatives add to the announcement on Friday regarding the creation of the National Net Zero Authority to help workers and companies in heavily polluting industries like coal, gas or manufacturing to find new jobs in emerging cleaner industries like renewable energy. This will be backed by $400 million from the existing $1.9 billion Powering the Regions Fund. $146.1 million has also been tagged to support electric vehicle uptake, including funding for electric vehicles charging infrastructure.

The Treasurer bookended the budget speech with an acknowledgment of Country and ended by emphasising the importance of constitutional recognition of First Nations people through the Voice. He also highlighted the 'defining, decisive decade ahead' where the global transition to clean energy will be key to Australia’s growth, prosperity and creation of a fairer society.

Good to see a focus on both mitigation and adaptation in the Australian budget announced today, including lots of new investments in renewable energy, and $28M over 2023-2024 towards the funding of a National Climate Risk Assessment and National Adaptation Plan. Also great to see the funding of the Australian Centre for Disease Control – and hopefully this has a strong climate and health element to it.

As expected, the focus of the budget was on making Australians’ lives easier in the short term. It also has some concessions to longer-term priorities. The energy transition is to be managed by a new “net-zero” authority. A brake is to be applied to fossil-fuel companies in the form of slightly less generous tax breaks. And there is a modest investment in targeted conservation actions, including improving water quality on the Great Barrier Reef. But we need to be doing more. 
 
The stretch goal of the Paris Agreement—to limit warming below 1.5°C above preindustrial—is already nearly beyond our grasp. In an ideal world, we could have achieved this goal by reaching net zero by 2050, as the Government intends to do. But the effectiveness of this action depends entirely on how much fossil carbon we emit before that point. In these terms, we are not doing well, with global emissions rising, not falling. Opening new fossil-fuel operations, like those in the Beetaloo Basin—in contradiction to the advice provided by the International Energy Agency (IEA)—won’t help. Providing relief to our children now really doesn’t help that much unless we do our best to ensure that they inherit a liveable planet.

On the surplus:

This surplus belongs to inflation. Tax receipts have soared due to bracket creep. This is unsustainable and highlights the importance of keeping Stage 3 tax cuts, which largely just return some bracket creep. It also highlights that such brackets should be indexed lest people's disposable income be continually eroded.

On the gas tax:

Gas and resources companies make for a good boogey man and cash cow. They are politically unpopular and are easy to tax. However, consumers could ultimately be the loser: gas companies will ultimately increase prices to off-set the increased costs. This would, however, increase tax revenue.

On ‘cost of living relief’:

The government packaged this as disinflationary. This is false. The cost of living ‘relief’ is equivalent to a cash handout and has the same effect. It is inflationary. A bigger concern is that the people who are excluded from such ‘relief’ are ultimately funding those who are. Ironically, this is therefore the opposite of relief for those people.

On superannuation tax:

The superannuation tax policies are neither modest nor sensible. The proposal is based on the politics of greed and envy and the rhetoric surrounding it has involved ‘othering’ hard working Australians who have worked and saved their whole life. The politics have been dirty and disingenuous. The super tax grab would tax unrealised capital gains. In other words, it will tax people on a potentially temporary increase in the value of an asset even if they have not sold it. But, what happens if the asset then falls in value: do they get a tax credit? This is terrible precedent. Not only that, the $3 million threshold will capture everyone due to the impact of inflation: $3 million might be a lot now but it will not be by the time university students retire.

On housing:

The government is right to take a light touch approach. Government disruption undermines confidence and ultimately deters construction. Maintaining the status quo will let the market move towards equilibrium, enabling supply to catch up with demand. The government is right to leave negative gearing and capital gains alone: after all, landlords often bleed money for years on property, with rents being a fraction of many mortgage payments. The government is also right to encourage more supply with incentives rather than penalising existing owners. The government has its work cut out for it though to convince builders that incentives will not be reversed, especially given their approach to superannuation.

On stage 3 tax cuts:

The government has left these in place. For the moment. This is appropriate. Australia’s tax rate is significantly higher than that of competitor environments, such as the US, Hong Kong, and Singapore. Australia must compete with these locations to attract business and talent. Stage three tax cuts are an important part of this. However, brackets should be indexed in order to eliminate bracket creep and broader reductions are necessary

Doubling tax on super balances over $3 million 

The increased taxation is “only expected to affect around 80,000 people or 0.5% of super accounts from 2025–26”. The $3 million cap is not future proof, as it would not be indexed to the rate of inflation, in the long run, treasury modelling shows the young generation, even if they only earn the average wage now, will be hit by the new super tax when they turn 60. 

The budget papers forecast $2.3 billion revenue by its first full year of new tax collection in 2027-2028, with an implementation cost of $47.6 million. And people may shift money out of super system to avoid the $3million cap.

Earlier and more frequent super payment for employees

From 1 July 2026, employers will be required to pay their employees’ super on payday, rather than quarterly. Companies affected need to re-plan their cash flows, but it would reduce the liabilities sitting on the companies’ book.

"The earlier and more frequent super payment helps to mitigate unpayment and underpayment. In 2019-20, $3.4 billion of superannuation entitlements were unpaid. 
It also aligns with the purpose of additional $27 million spending on resources for ATO to identify under or unpaid super.

We are really pleased to see the strong focus on eradicating recreational vaping and reducing tobacco use in the Budget. This is a major health policy initiative and it is really encouraging to see Australia taking the lead in this area. The funding will support the implementation of initiatives outlined in the National Tobacco Strategy released last week, including a public health information campaign to discourage vaping; quit support programs, a new national lung cancer screening program and programs for First Nations peoples.

We’re also really pleased to see funding for research into prevention and early intervention for chronic conditions, and the Health Star Rating System ($4.3 million and $3.2 million respectively)

It is good to see that the Government has listened to the advice of experts on maintaining a strong focus on tobacco as well as vaping. While smoking rates continue to decline, tobacco still causes 44% of all cancer in Australia [1]. That’s why raising the excise on tobacco products is an important public health measure. This will help to drive down smoking rates even further, and raise $3.3 billion over 4 years.

It’s really important that the taxes raised from this measure are reinvested into health to ensure good health for all Australians. As a research organisation that focuses on health equity, we would like to see the Government invest in the other priorities outlined in the National Preventive Health Strategy release in late 2021, including in particular improving access to and consumption of healthy diets and increasing physical exercise. Preventive health spending in this budget was disappointing, with only $53.4 million allocated over 5 years. Australia has the sixth highest rate of obesity among 22 of the OECD countries, and 95% of adults have inadequate fruit and vegetable intake, and 95% of children have inadequate vegetable intake [2]. Diet and exercise contribute to the prevalence of chronic disease. 47% of Australians (11.6 million people) suffered from one or more of 10 selected chronic conditions

The funding allocated to preventive health seems out of balance with the burden of chronic disease on the population. Chronic conditions contributed to nearly 9 in 10 deaths (89%) in 2020 and were involved in 5.8 million hospitalisations (52% of all hospitalisations) in 2019–20. Taking action on these important determinants of health will improve Australians’ quality of life and enable us to live longer, healthier lives.

The much-touted pay rise for aged care workers is not as straight forward as you might want to think it is. Historically, aged care workers have been one of the least paid workers across the board. Although the pay rise could not have come at a better time with the inflation at record high, rental crisis and the RBA increasing the interest rate almost every month, the question remains ‘is it too little too late’?

Words like ‘seismic shift’ are being used for the historic pay rise which the industry has not seen for a while. Symbolically, it is as this could prove to be a much-needed morale booster for a tired and weary aged care workforce but in terms of monetary value does the dollar stretch far enough? Those not under the awards (support staff, administrative staff and junior kitchen staff) may miss out as providers are not obliged to pass on the pay rise. This is a bittersweet moment for the aged care workforce who have been treated like the ‘Cinderella’ of the health sector and a 15% pay rise is not the silver bullet for workforce crisis, albeit it is a good start.

"Really pleasing to see increased investment in Medicare, including tripling the bulk billing incentive payment which will improve access to health care for those most in need.

We also support the funding for improved access to multidisciplinary care in the community and commissions of allied health services to support care for chronic conditions, and funding for the improvement of chronic wound management.

Pleasing to see funding to put the Australian Digital Health Agency and My Health Record on a more sustainable footing, however more will be required in future to deliver the Government’s vision of more digitally-enabled healthcare for Australians."

The key standout deliverables in this budget centre around making it possible for Australians to meet basic cost of living needs. Touching broadly on public health measures with cheaper medication for Australians living with chronic illness and increases to Jobseeker payments there is a little something for everyone. 

What is an exciting and contemporary development, is the scheme enabling couples, friends, and siblings to buy a house together with just a 5% deposit. This is likely to be popular- enabling young adults to enter the housing market. Their market participation may lead to an inclusive and creative increase in house share opportunities for this cohort. Alongside this the relief to renters is needed and will be welcomed.

In 2023–24, the Australian Government will provide the states with $87.4 billion in ‘payments for specific purposes’. Out of this amount, only 1.9 billion (2%) is dedicated to ‘affordable housing’. In comparison, 15.5 billion is dedicated to ‘infrastructure’, eight times the affordable housing amount.

The amount allocated to affordable housing is tiny, considering that rent and dwelling costs are the largest household expense by far, costing 20 to 25% of the annual income of the average Australian household.

According to the Australian Bureau of Statistics, in 2017–18, 11.5% of households spent 30% to 50% of their gross income on housing costs with another 5.5% spending 50% or more. And the COVID-19 pandemic has only increased housing stress.