explainer

The 2022 Australian Federal Budget: Who are the real winners and losers?

All eyes were on Treasurer Josh Frydenberg tonight as he announced the 2022 Australian Federal Budget.

With an election around the corner, the Morrison Government was keen to provide voters with confidence.

Budgets usually set out spending for the next financial year beginning July 1, but this year's budget is a pre-election budget. So any measures that were announced by Frydenberg only come into effect if the Liberal Government wins the federal election.

"Tonight, as we gather, war rages on in Europe. The global pandemic, devastating floods that have battered our communities. We live in uncertain times. The last two years has been tough for our country. We have overcome the biggest economic shock since the Great Depression. Our economic recovery is the strongest in the world," Frydenberg said.

Watch Treasurer Josh Frydenberg discuss women in the workforce. Post continues below.


Video via ABC. 

The pre-election budget will also see the government try to counter surging cost-of-living concerns.

"A strong economy means a stronger budget. We are building an even stronger, more secure and confident Australia where aspiration and enterprise are encouraged and rewarded, and families have greater flexibility and choice," Frydenberg said.

Here's everything you need to know about the 2022 Federal Budget, including who the winners and losers are with the proposed measures.

The losers.

Small business owners. 

What small business owners had hoped Frydenberg's fourth budget would address was helping them overcome labour shortages, supply chain issues, rising input costs and global market pressures.

While some tax deductions have been offered for investments in training and technology, the price tag is still pretty small - sitting around the $100 mark.

Those looking for more mental health support.

There was a 'landmark commitment' at the last federal budget including funding to Headspace and Lifeline, and the government have claimed to build on that this year - but no concrete dollars have yet been devoted to the cause. 

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The environment.
An investment in climate change technology was stated, but no dollars were dedicated to the cause. There is no new direct funding in the budget for renewable energy generation projects. Instead, the government is investing just under $250 million over five years to support investment in low emissions technologies including hydrogen. 

There were statements boasting Australia has "the highest uptake in solar panels," but Frydenberg failed to mention that we're still behind compared with so many other countries. The lack of commitment and investment will likely be troubling for many. One positive though is the investment in research and reef management for The Great Barrier Reef. 

Foreign countries in need of support.

Foreign aid is set to bounce around over the next four years. While the amount will rise to $4.4 billion in 2022-23, it will then fall to $3.7 billion in 2023-24, rise again in 2024-25 and fall in 2025-26. 

And considering the rising threat of climate change and rising sea levels for nations in the Pacific Ocean, this could push these foreign countries to reach out to other countries for support, rather than Australia.

First home buyers.

While the Home Guarantee Scheme will double to 50,000 places per year, allowing first-home buyers to put down a deposit of just five per cent, or two per cent for single parents - we're not so sure that this is a win overall. 

With the threat of increased mortgage interest rates, allowing people to purchase out of their means may lead to later financial ruin. Some experts are concerned that it won't do anything to address or solve the bigger housing affordability crisis. 

State schools.

Payments for state and territory government schools are expected to drop by $796.5 million over four years.

Future generations.

The budget's bottom line will see future generations paying back Australia's debt for decades to come. Net debt will reach $714.9 billion by June 2023 and is still growing. It’s expected to peak in 2025, before beginning to decline. Not to mention the lack of climate change action - future generations are in for a bit of a challenge.

Outside of the new apprenticeship scheme, there isn't a lot for young people to get excited about either. There's also been no change in the budget for students at either university or TAFE, meaning no fix for rising fees and student debts, which many are struggling to pay off.

Listen to this episode of No Filter, where Mia Freedman interviews Josh Frydenberg's rather busy year. Post continues after podcast.

The winners.

Anyone who drives a car and is worried about the cost of living.

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Events abroad are pushing up the cost of living at home: higher fuel shipping costs are increasing inflation and stretching household budgets.

The government plans to temporarily reduce the cost of fuel by "cutting the excise on fuel" for a period of time. 

Currently, motorists are paying 44.2 cents in excise for every litre of fuel they buy. However, Frydenberg said that in a bid to cut down on the rising cost of living in Australia, his government will cut that excise and Australians will save 20 cents a litre every time they fill up. As for how long that cut will stay in place, Frydenberg said it will be in place for the next six months. 

It comes at a cost of $3 billion to the government. It will likely take approximately two weeks for motorists to see lower prices, even though the excise cut will start at midnight tonight.

Another measure includes a one-off $420 cost-of-living tax offset for low and middle income earnings. Six million Australians will also receive a one-off $250 cost-of-living payment, with clarification on who will be eligible likely given at a later date.

Although, cost of living is still going to rise and affect people's day-to-day life. The budget is predicting wages will only be just higher than inflation in the next couple of years, meaning cost-of-living pressures are unlikely to ease any time soon.

Those affected by floods.

It feels very wrong to say those affected by floods are a winner in any scenario, but what the government has budgeted for a disaster support fund of more than $6 billion, with $1.29 billion paid out to individuals, according to the treasurer.

"We will stand with these communities and help them rebuild," he said on Tuesday night. "It will deliver hope, work and the prospect of returning to a better life."

The budget papers said flood-affected communities face a "long road to recovery", as the full picture of physical damage and economic impact ultimately remains uncertain.

Aged care workers.

Australians who currently work in the aged care sector will receive a cash bonus payment for their hard work.

The government pledged to provide $210 million to support the aged care workforce, with cash bonuses of $800 for workers - made in two separate instalments. It applies directly to workers providing care and support in government-subsidised home care, along with residential aged care workers. 

And importantly, nearly half a billion dollars will be set aside to implement recommendations from the aged care royal commission. Although it's important to note that despite calls from the sector, this budget shows no indication of increasing age care workers' pay. Time will tell as to whether not aged care as a whole was really a winner in this budget.

Those looking for jobs.

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People on the lookout for work are better off than ever before, according to Frydenberg. The unemployment rate remains low and is even set to go lower. 

"We have a historic opportunity to get young Australians into secure and well-paid jobs," Frydenberg said. 

Frydenberg also shared that the Jobkeeper initiative had saved 700,000 jobs in total. The government will also be providing $2.8 billion investment to increase the take up and completion rate for apprentices. Alongside this is support for those wanting to upskill in their work, with $3.7 billion towards a national skills agreement.

Support services for women.

There has been some progress in support for women in this federal budget. Some of the improvements include a $1.3 billion package to end violence against women and children, booster domestic violence emergency services, miscarriage leave, endometriosis support and better paid parental leave.

Although $1.3 billion in comparison to some of the other Budget measures does weigh up on the short side. 

Cybersecurity.

"Current events in Ukraine have been a helpful reminder that we must increase our self reliance. We must invest more in the defence of our nation," Frydenberg said.

Almost half of the total $575 billion Budget spend will be pumped into defence capabilities.

It includes $38 billion to boost the workforce by 18,500 personnel, $50 billion for frigates and destroyers, and $10 billion for naval infrastructure.

A decade long $9.9 billion spend on Australia's offensive and defensive cyber capabilities is most likely in relation to growing tensions with overseas powers, and the conflict taking place in Europe.

Regional areas.

Frydenberg announced an unprecedented $7.1 billion regional investment package, that includes transformational investment in agriculture, infrastructure and energy.

He said: "These long-term investments will unlock new economic frontiers and grow our national economy."

A new $1.3 billion telecommunications package will also expand mobile coverage across regional transport routes, training places for doctors in regional universities, better access to MRI machines, mental health services and childcare centres, Frydenberg shared. 

What are your thoughts on this budget? Let us know in the comments below.

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Feature Image: Getty/Mamamia.