By Poppy Johnston
The federal budget will be delivered by Treasurer Jim Chalmers on May 14 at a time when the economy is slowing and inflation is moderating but still too high.
What is known about the Federal Budget.
The third federal budget under the Albanese government is due to be handed down on May 14 and several spending and policy announcements have already been made.
THE BIG PICTURE
- A second surplus is still the goal in 2023/24, with the underlying cash balance for the 12 months to February showing a deficit of $6.1 billion
- The $22.1 billion surplus in 2022/23 was the first in 15 years
- The mid-year budget review had forecast a deficit of $1.1 billion for the 2023/24 fiscal year, narrowing from the $13.9 billion forecast in last year’s budget
- The revenue upgrades experienced in the past two budgets are unlikely to be as substantial because of falling commodity prices, including iron ore, and a weakening labour market
- Above target but moderating inflation remains the primary economic challenge for the budget but the slowing domestic economy is also emerging as a larger priority
- A troubled Chinese property sector and geopolitical tensions in the Middle East and Europe are among the global challenges weighing on the budget
Budget Measures
- Super is to be paid on government-funded paid parental leave and the details are set to be unveiled in the budget
- Almost 500 “nuisance” tariffs are set to be scrapped that apply to a wide range of imported goods – full details will be in the budget
- The reworked stage three reform package is considered to be broadly revenue neutral in the short term but will increase tax receipts by about $28 billion over the medium term
- More “targeted” financial support for small businesses and households could be on the cards
Future made in Australian Act
The Future Made in Australia Act involves deploying public funds to give viable zero carbon industries and projects a leg up so they can attract more private investment. More details are expected to be revealed in the budget but initiatives it captures so far include:
- The $1 billion Solar SunShot program aims to bolster the nation’s solar panel manufacturing capabilities
- The $2 billion Hydrogen Headstart program is intended to fund large-scale hydrogen production projects
- The $4 billion total available under the Critical Minerals Facility is designed to help complement commercial financing and help get critical mineral projects off the ground
- About $400 million in loans has been announced for Australian company Alpha HPA to develop a high purity alumina facility in Gladstone, Queensland.. Financing will in part come from the Critical Minerals Facility
- About $185 million in loans have been conditionally approved for Renascor Resources to fast track the first stage of a purified graphite project in South Australia
- The government says its net zero industrial policy agenda has been underpinned by the National Skills agreement, the National Reconstruction Fund, the establishment of the Net Zero Economy Authority and its push to rollout renewables and spur innovation.
