On October 25, Treasurer Jim Chalmers handed down what is being termed a "bread and butter" Federal Budget – not fancy or flash, but responsible and solid. After nearly a decade out of government, Labor’s plan primarily focuses on delivering its core election promises and is set against a backdrop of a deteriorating global economy, rising inflation and persistent structural spending pressures that require a delicate balancing act of cost-of-living support, investment in the economy and fiscal constraint.
The FY22-23 Budget includes important initiatives aimed at addressing structural drivers of inflation – energy, housing and the workforce – while resisting short-term cost-of-living measures that would add to inflation. Key priorities include:
Healthcare, aged care and the NDIS continue to be Labor’s key priorities and are well supported
Climate, a key determining factor of the last election, is also prioritised
Infrastructure spending has been put under the microscope, measured against the supply constraints in the economy and the spending preferences of the new government
Women are also in focus with gender equality investment, more affordable childcare, boosting the paid parental leave scheme, and reforms to address pay inequity.
“It is hoped this budget will lay the foundation of a stronger, more resilient economy that will assist in navigating global uncertainty,” says Coates CEO Murray Vitlich.
The global economy is facing a serious and significant downturn. The United Kingdom and Europe are likely already in recession, while a recession in the United States now looks very difficult to avoid. Australia’s largest trading partners, China, is also experiencing a slowdown.
Meanwhile, the Australian economy is expected to grow by 3.25% over 2022–23, before slowing to 1.5% in 2023–24. A slowing economy means higher unemployment, which is predicted to rise to 4.5% in June 2024, although this remains low by historical standards.
“The economic news is not all bad,” says Murray. “Australia has some significant advantages – low unemployment, a robust resources sector and strong economic growth coming out of the pandemic. All of which boosts the budget bottom line in the near term.”
So what does the budget mean for our industry?
Reflective of infrastructure’s importance in driving national economic growth, the Albanese Government has allocated $9.6 billion towards several nationally significant infrastructure projects, which is good news for our customers in the construction and infrastructure industry.
Key commitments include:
$300 million for Western Sydney Roads Package, to fund planning and preparatory works for the Castlereagh Connection, planning for Richmond Road and planning and early works in the North West Growth Corridor
$500 million for acquisition, planning and early works of the Sydney to Newcastle section of the High Speed Rail Network
$2.2 billion for the Suburban Rail Link in Victoria to improve its public transport system
$586.4 million of additional funding for a major upgrade of the Bruce Highway to widen a 13-kilometre stretch through Brisbane's outer northern suburbs
$1.5 billion for upgrading important freight highways, sealing the Tanami, and upgrading Central Arnhem Road, as well as the Dukes, Stuart and Augusta highways in SA
$540 million to upgrade Tasmania’s important road corridors, including the Bass Highway, the Tasman Highway and the East and West Tamar Highways
$125 million funding to help build an electric bus network for Perth.
“The budget ensures the Commonwealth’s infrastructure spending is responsible, affordable and sustainable, which will continue to bring long term benefits for our customers, our business and our people across key markets,” says Murray.
Construction remains a significant driver of economic activity in Australia, generating 9% of GDP and employing a workforce of more than 1.2 million people. Within this sector, residential construction also plays a vital role in job creation and contributes 5% of GDP.
Customers in the residential building sector stand to gain due to the government’s ambitious goal of building
one million new homes over five years from 2024. Under the new national Housing Accord, the Commonwealth has targeted an additional 10,000 affordable dwellings, with the states and territories expected to deliver the same number of homes for low to moderate income households.
With the nation facing an ongoing and widespread skills shortage, the Government will provide 180,000 fee-free TAFE and vocational education places in 2023. This will be supported by a $1 billion one-year National Skills Agreement, jointly funded with the states and territories, as part of a commitment to provide 480,000 TAFE places over four years.
The Government will also invest $12.9m to establish Jobs and Skills Australia, a new statutory body that provides independent advice to government on Australia’s current and future skills and training needs by bringing together employers, employees, governments and training providers.
Meanwhile, the Australian Skills Guarantee will ensure that one in 10 workers on major federally-funded projects is an apprentice, trainee or paid cadet, with specific targets for women.
SHARE THIS ARTICLE
By submitting this enquiry you agree to Coates's Communications Terms & Conditions