May 10, 2023

2023 Federal Budget Summary

Everything you need to know about the 2023 Australian federal Budget.
What you need to know
The Announcements
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What you need to know

  • Treasurer Jim Chalmers delivered his second federal Budget at 7:30 PM AEST Tuesday 9th May.
  • The Government has forecast an underlying cash balance surplus of $4.2billion for 2022-23. This is significantly better than the $36.9 billion deficit that was forecast in last October’s Budget.
  • The better than expected result was in large part due to increases in revenue from the high price of commodities and increases in revenue from taxation due to the low unemployment rate
  • Gross debt is down 3.9% to 34.9% of GDP, the Treasurer stated that this would significantly reduce the cost of interest payments on debt.
  • The Government is forecasting a $13.9 billion deficit in 2023-24 with gross debt expected to increase to 35.8 % of GDP.
  • GDP growth is expected to slow from 3.25% in 2022-23 to 1.5% in 2023-24.
  • The Budget remains in structural deficit.
  • The key focus areas of the Budget are: reducing the high cost of living, investing in key government services such as Medicare and the NDIS, strengthening the economy through new taxation and energy investments, and broadening opportunities for disadvantaged groups.
  • $14.6 billion of cost of living relief has been announced: this includes $3 billion in energy relief to 5 million households and 1 million small businesses, $2.2 billion to the PBS, an increase in JobSeeker, and increases in Commonwealth Rent Assistance.
  • $5.7 billion over 5 years to strengthen Medicare. This includes $3.5 billion to triple bulk billing incentives for GP consultations.
  • $590 million to the National Plan to End Violence against Women.
  • A 15% global minimum tax on multinational corporations has been announced. From 1 January 2025, the Government will be able to tax the foreign operations of large foreign multinationals to ensure that they have paid at least 15% tax on the group's income. This is part of a wider OECD initiative. This is expected to raise $370 million.
  • $20,000 instant asset write-off for small businesses.
  • Limiting income deductions to 90% to increase Petroleum Resources Rent Tax (PRRT) revenue by $2.4 billion.

The Announcements


  • The Stage 3 income tax cuts will not be scrapped by the Labor government, costing theBudget $245 billion over ten years. Stage 3 tax cuts are not mentioned in the Budget papers. Treasurer Jim Chalmers stated in the Budget lock-up press conference that this was consistent with standard Budget practice.
  • Interest payments on Commonwealth Government debt will cost the federal Budget $112billion over five years, this is better than the October Budget forecasts.
  • The Government has announced changes to the Petroleum Resources Rent Tax (PRRT). These changes include limiting the proportion of PRRT assessable income that can be offset by deductions to 90% and bringing forward the date that liquefied natural gas projects are expected to pay PRRT. The changes will take effect from July 1 2023, and are expected to raise $2.4 billion.
  • A 30% concessional tax rate has been announced on super balances over $3 million.
  • Power bills are expected to increase by 11% in 2023-24, much better than the 36% predicted in November.

Cost of Living

$14.6 billion to relieve the increasing cost of living, this includes:

  • $3 billion in energy bill relief for 5 million households and 1 million small businesses. $500 for eligible households and $650 for eligible small businesses.
  • $4.9 billion to increase the rate of JobSeeker, Austudy, and Youth Allowance by $40 per fortnight.
  • Lowering the age to receive a higher rate of JobSeeker from 60 to 55.
  • $1.9 billion to extend single parent payments until a child turns 14.
  • Increasing Commonwealth Rent Assistance by 15%.
  • Reducing the managed investment trust withholding tax rate from 30% to 15% to incentivise build-to-rent projects and increase housing supply.
  • Increasing wage growth remains a priority for the Albanese government.
  • $2.2 billion for new PBS medicine listings.
  • Doubling the maximum dispensing quantity of 300 PBS medicines, allowing some patients to receive 2 months of . This is expected to save patients $1.4 billion in out of pocket costs.
  • $1.3 billion to establish a Household Energy Upgrades Fund to provide concessional finance to energy saving household upgrades.

Aged Care

  • $14.1 billion to boost aged care workers' pay by 15%.
  • $487 million to extend the Disability Support for Older Australians Program.
  • $309.9 million to implement the recommendations of the Royal Commission into Aged Care, this includes $139.9 million to enhance the Star Rating system.
  • $166.8 million to provide 9,500 additional home care packages. This is aimed at helping older Australians stay at home as long as possible.
  • $81.9 million to develop and implement a new Aged Care Act to support sector reform.
  • $52.1 million in funding for aged care providers in very remote areas.
  • $12.9 million to improve food and nutrition in aged care.
  • Appointment of a First Nations Aged Care Commissioner.
  • $591.3 million for the Government’s response to Covid-19 in aged care.


  • $189.6 million in additional assistance to Ukraine, including Bushmaster Protected Mobility Vehicles, unmanned aerial vehicles, and infantry training to the Ukrainian Armed Forces.
  • $3.3 billion to establish an Advanced Strategic Capabilities Accelerator within the Department of Defence.
  • $37.4 million for current ADF deployments (Ukraine, Solomon Islands)
  • $254.1 million to replace the Department of Veterans’ Affairs legacy ICT systems.
  • $8.3 million to support the John Monash Centre in France.
  • $500,000 to support veteran families at risk.

The Government has responded to the long-awaited Defence Strategic Review (DSR). So far this response has included:

  • $4.1 billion for Long-Range Missile Systems and a sovereign manufacturing capability to produce them in Australia;
  • $4.5 billion for the initial steps in Australia's acquisition of nuclear-powered submarines.
  • The AUKUS nuclear submarine acquisition will cost up to $368 billion over several decades;
  • Initiatives to improve the growth and retention of a highly skilled defence workforce in northern bases;
  • Investment in disruptive new technologies to boost ADF capability, in close partnership with Australian industry;
  • A commitment to make cuts to several programs currently underway. The specific programs to be cut have not been confirmed but the DSR has indicated several programs could be on the chopping block such as: The Infantry Fighting Vehicle Program, the Self-Propelled Howitzer Program and the Hunter Class Frigate Program.
  • The Government has announced a $500 million deal to take Canberra-based defence contractor, CEA Technologies Pty Ltd, into public hands.
  • The Government has indicated that a sovereign defence manufacturing capability will be a key goal, so that Australia can withstand the threats of naval blockades.
  • The Government has announced that it will invest $400 million to offer $50,000 bonuses to ADF personnel who agree to sign up for a further three years.


  • $9 billion boost in childcare subsidies which includes increasing the maximum subsidy rate by up to 90 per cent for the first child in care.
  • The Government has indicated its intention to undertake school-reform by acting on the OECD’s Education Policy Outlook report which has just been released.
  • $3.5 million in funding for teachers to reduce increasing rates of disruptive behaviour in classrooms.
  • $3.7 billion for a five-year national skills agreement, in addition to $400 million to support another 300,000 free-free places at TAFE and vocational education.
  • $72.4 million to support early childhood education and care.
  • $35 million to attract more people to the teaching profession.
  • $32.8 million to support school engagement for at-risk First Nations young men.
  • $18.7 million in higher education support.

Energy & Environment

  • $3 billion in energy bill relief for 5 million households and 1 million small businesses. $500 for eligible households and $650 for eligible small businesses.
  • $2 billion to accelerate the development of Australia’s hydrogen industry.
  • $1.3 billion to support the decarbonisation of existing industries.
  • $1 billion in funding to the Clean Energy Finance Corporation (CEFC).
  • $314 million in tax cuts for businesses that "go green". Small and medium-size
    businesses that invest in energy efficient equipment could be eligible for a tax deduction
    of up to $20,000.
  • The Government has announced a $12/GJ price cap on domestic gas prices until July 1
  • $355.1 million in funding has been announced for national parks.
  • Energy Minister, Chris Bowen announced the creation of a National Net Zero Authority.
    The Authority will cost $23 million in its first year.
  • $236 million for flood warning infrastructure.
  • $148.6 million to future-proof the Murray-Darling Basin Authority.
  • $57.1 million to the critical minerals industry.
  • $18.1 million for an independent review of the Australian Carbon Credit Unit.
  • $10 million to a national waste education campaign.
  • The Government has scrapped the Dungowan and Emu Swamp dam projects.
  • $341.2 million to protect endangered species.
  • $214.1 million to deliver the Nature Positive Plan.
  • $32.7 million in water market reforms.

The Treasurer has announced a commitment to boost the renewable energy sector by:

  • The creation of a “sovereign green bonds” program to be rolled out mid-2024 to raise finance for public projects that support Australia’s net zero transformation;
  • Co-funding a development phase of an “Australian Sustainable Finance Taxonomy” – a project to help investors more easily target their funds towards particular kinds of sustainability projects;
  • Providing $4.3 million in funding for ASIC to expand “surveillance and enforcement functions” on businesses making green claims.

Foreign Affairs and Trade

  • $1.9 billion to expand Pacific Island engagement.
  • $468.8 million to modernise the Australian Secret Intelligence Service (ASIS).
  • $158.6 million in Official Development Assistance to developing countries.
  • $55.7 million to increase Australian diplomatic and business engagement with Southeast
    Asia and Timor-Leste.
  • $10.8 million to the Australian Embassy in Doha, Qatar to continue Australian diplomatic
    representation to Afghanistan.
  • Yet to be costed financing for a shipyard facility in the Solomon Islands.


  • $5.7 billion over 5 years to strengthen Medicare. This includes $3.5 billion to triple bulk billing incentives for GP consultations. The Treasurer told the Budget lock-up press conference that this was one of the most important announcements in the Budget.
  • $1 billion to double the dispensing time frame from 30 to 60 days for 300 medicines on the PBS.
  • $2.2 billion for Medicare reforms, including incentives for after-hours doctors.
  • $556.2 million to strengthen mental health and suicide prevention systems.
  • The Government has announced it will ban nicotine and non-nicotine vapes. The only
    permitted use will be therapeutic vapes, which require a prescription.
  • The Government will increase the tobacco excise by 5% over three years, raising over $3
    billion in tax revenue.
  • $449.4 million for the National Immunisation Program.
  • $358.5 million to deliver Medicare Urgent Care Clinics.
  • $2.2 billion for new PBS medicine listings.
  • $137.2 million to the Medicare Benefits Schedule.
  • $757.4 million for Covid-19 vaccines.
  • Subsiding the cost of eggs, sperm, or embryo storage for patients with cancer and people
    at risk of passing on genetic diseases or conditions.
  • $91.1 million to establish the Australian Centre for Disease Control.
  • $9 million to upgrade radiation and nuclear safety.
  • $13.2 million to reduce the transmission of HIV.
  • $39.8 million to support major sporting events and physical activity.
  • $53.4 million to support research into women's health outcomes.
  • $33.6 million to extend existing alcohol and drug programs in the community.


  • $10 billion for the Housing Australia Future Fund, which will commit to building 30,000 new rental properties over 5 years. This will likely include a minimum of 1,200 social and affordable houses in each state and territory.
  • $1.3 billion to establish a Household Energy Upgrades Fund to provide concessional finance to energy saving household upgrades.
  • Reducing the managed investment trust withholding tax rate from 30% to 15% to incentivise build-to-rent projects and increase housing supply.
  • $67.5 million to boost homelessness funding.
  • Expanding the eligibility of the Home Guarantee Scheme to include any 2 eligible people to be joint applicants, Australian permanent residents, single legal guardians of children.


The Budget has invested $1.9 billion in initiatives for Indigenous Australians, these include:

  • $336.6 million for the delivery of the Voice to Parliament referendum, this includes funding for both the ‘yes’ and ‘no’ campaigns.
  • $238.5 million to improve First Nations cancer outcomes.
  • $145.3 million for the safety of First Nations women and children.
  • $111.7 million to support the Northern Territory Government's building of new remote housing.
  • $57.3 million for Covid-19 testing and vaccinations for indigenous Australians.
  • $38.4 million to support high quality, culturally appropriate primary and secondary education for First Nations children, with a focus on remote areas.
  • $9.5 million of spending for a civics and awareness campaign to educate the public about the proposal for an Aboriginal and Torres Strait Islander Voice in the Constitution.
  • $1.5 million for the Museum of Australian Democracy and Constitution Education Fund
    Australia to spread awareness of referendum processes ahead of the Aboriginal and Torres Strait Islander Voice referendum.
  • $14 million for additional policing in Alice Springs, as part of an initiative aimed at reducing the burden of crime in Indigenous communities.
  • Appointment of a First Nations Aged Care Commissioner.
  • $32.8 million to support school engagement for at-risk First Nations young men.


  • $15 billion to the National Reconstruction Fund.
  • $3.4 billion to support the venue infrastructure for the 2032 Brisbane Olympic and Paralympic Games.
  • $1.1 billion for existing road maintenance and safety programs.
  • $240 million into a new stadium at Hobart's Macquarie Point. The stadium will be
    completed by 2028 to be the home ground of the new Tasmanian AFL team.
  • $535.3 million for national institutions such as the National Gallery, National Museum of
    Australia, and National Archives of Australia.
  • The Government has announced a 90 day review into infrastructure projects on the
    former Government's infrastructure pipeline. It is likely that some of these projects will be axed. However, the Prime Minister has announced that there will be no cuts to any infrastructure projects that have already been allocated funding.
  • The Snowy Hydro 2.0 project will be delayed.

Social Services

  • $4.9 billion to increase the rate of JobSeeker, Austudy, and Youth Allowance by $40 per fortnight.
  • Lowering the age to receive a higher rate of JobSeeker from 60 to 55.
  • The Government has announced it will remove the five-year averaging of the wage component of the indexation calculation, which will boost funding for community services by $4 billion. This change will affect a number of key services such as Medicare benefits schedule, commonwealth home support, affordable housing and homelessness, mental health, First Nations health and community legal services.
  • The Government has announced that single-parents can access special welfare payments until their child turns 14. Currently, payments cease when a child turns 8. These changes will take effect from 20 September 2023.
  • $720 million in further funding for the NDIS.
  • $50 million in funding to target fraud and non-compliant payments within the NDIS as part of a new scheme.
  • The Government has announced it will scrap the ParentsNext program from next year and stop compulsory obligations for participants immediately.


  • The Government has committed to increased access to paid parental leave for 6 months from July 2023.
  • $590 million to the National Plan to End Violence against Women.


  • The Government has scrapped Australia's Significant Investor Visa.
  • The Government will scrap the dedicated agricultural visa.
  • The Government has announced plans to introduce a special category visa for New Zealand citizens.
  • The Government announced a new three-tiered approach to skilled worker visas, centred around raising the temporary skilled migration income threshold.
  • The Government has announced that more than $10m will be dedicated to improve the communications network used by first responders.
  • The government will save $43.2 million over four years by increasing the Meteorological Services Charge for international and domestic commercial airlines.

Winners and Losers


  • Older Australians
  • People on JobSeeker
  • Those that use bulk billed GP consultations
  • Defence industry
  • Aged care workers and those that receive aged care
  • Hydrogen industry
  • Single parents
  • Indigenous Australians
  • Renewable energy industry


  • Large multinationals
  • Pharmacies (potential shortages)
  • Those with large superannuation balances
  • Tobacco companies
  • Petroleum companies (although they may be pleased with the modest reforms to the
  • Airlines (increase in Meteorological Services Charge, although this a relatively small figure)

The last 14 months has unusually seen three federal budgets following the change of government in May 2022.

Read our report on Labor’s October 2022 Budget here.

Read our report on the Coalition’s March 2022 Budget here.

Long term state of the Budget

Government Spending

Of the $684.1 billion in expected government expenditure for 2023-24:

  • $250.3 billion will go to social security and welfare
  • $106.5 billion to health
  • $48.3 billion to education
  • $42.8 billion to defence
  • $29.1 billion to general public service

Nearly 50% of the Government's $680.4 revenue comes from individual income tax. A further 20% of government revenue comes from company and resource rent taxes.

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