The Treasurer handed down the Federal Budget for 2023-24 yesterday with a focus on combatting the cost of living crisis, inflation and a slowing economy, while planning for the future with investment in health, defence, housing and small business.
Here’s everything you need to know about the Budget overall, and what is most relevant to the strata, property, housing and infrastructure sectors.
The Big Picture – Australia’s Economy in 2023-24
The government’s headline messages included that:
- A Budget surplus of $4.2 billion is now forecast in 2022-23.
- This Budget prioritises responsible and targeted cost-of-living relief.
- The unemployment rate is near 50-year-lows at 3.5 per cent in 2022-23.
- The unemployment rate over the coming year is projected to remain low by historical standards, rising modestly to 4.25% in 2023-24 and 4.5 per cent in 2024-25.
- National income is being supported by elevated commodity prices and a strong labour market, which has revised tax receipts upwards by $67.2 billion across 2022-23 and 2023 -24.
- Global growth is set to slow to 2.75 per cent in 2023, before a modest pick-up to 3 per cent in 2024.
- The Australian economy is expected to expand by 3.25 per cent in 2022-23.
The Headline Makers – The Budget’s Big Announcements
Energy and Electric Vehicles
- Australian first National Electric Vehicle Strategy. Inclusion of multi-unit dwellings in the plan is a win for the sector and our advocacy.
- Household Energy Upgrades Fund – $1bn into the Clean Energy Finance Corporation to fund upgrades.
- 110,000 low-interest loans for energy-saving home upgrades, in partnership with private lenders.
- Driving the Nation Fund and Electric Car Discount (previous Budget, but costed in this budget)
- A new Fuel Efficiency Standard and Transport and Infrastructure Net Zero Roadmap and Action Plan are costed at $15.6 million in this budget.
- Community Solar Banks and Community Batteries for Household Solar (previously announced but costed in this budget).
Resilience and preparedness
- Previously flagged and costed $200 million through the Disaster Ready Fund for levee and drainage systems upgrades, building seawalls and bushfire risk reduction projects.
- National Urban Policy – $159.7 million urban Precincts and Partnerships Program will support funded coordination between Commonwealth and State and Territory Governments.
Small and medium business investment
- $20,000 instant asset write-off for small businesses with aggregated annual turnover of less than $10 million, for assets which are first used or installed ready to use between 1 July 2023 and 30 June 2024.
- At the same time, a new Small Business Energy Incentive for small and medium businesses will allow a bonus 20 per cent tax deduction for the cost of eligible depreciating assets, for a value of up to $100,000 of total expenditure.
- National Housing and Homelessness Agreement – underway and ready for consultation in 2023, SCA has been engaging with departmental and ministerial officials to ensure strata’s voice is heard.
- Build to Rent – taxation deductions and benefits that will grow the sector.
- Affordable rental housing and affordable housing initiatives.
- Housing Accord – 1 million well located homes with tax concessions down to 15% for build to rent.
- Community housing providers funding.
- Affordable housing – Commonwealth rent assistance.
- Electricity rebate of $500 per household for low-income earning households.
SCA submitted a Pre-Budget Submission to the Federal Government in January ahead of the Budget, which included priorities in sustainability, building quality and insurance affordability and availability. By issue area:
- Housing affordability and housing stimulus are a focus for the federal government, however, the increased spending on jobs and skilling present SCA with an opportunity to work with the property and trades sectors to improve building and construction quality through better training and certification.
- Despite significant attention on sustainability (including renewables, water, waste, EV charging) that was a large focus throughout the election last year, there was very little in terms of new spending on renewables and low emissions in the Budget outside of programs and funding already on offer, with spending focused on technology development and rollout in regional Australia.
- SCA has continued work to improve insurance affordability and availability throughout the budget cycle with heavy involvement in the design of the Reinsurance Pool and Strata Titles Mitigation Scheme and has successfully delivered messaging on stamp duty and tax relief.
SCA’s Proactive Relationship Building
By successfully targeting federal portfolios with proactive advocacy of the strata sector’s agenda, SCA is well-placed to follow up with advocacy into all aspects of the recent budget announcement, with contact within:
- Treasury – Insurance.
- Treasury – Housing.
- National Housing and Infrastructure Investment Fund (NHFIC).
- Minister for Housing.
- Assistant Treasurer – Insurance.
- Department of Social Services – National Housing and Homelessness Plan.
- Clean Energy Finance Corporation.
- Department of Climate Change, Energy, the Environment and Water – Energy Efficiency, National Energy Ratings Schemes, National Electric Vehicle Strategy.
SCA will continue to advocate for the strata sector by meeting with members of government and opposition, stakeholders, undertaking media activities and member communication.