The Albanese Government has delivered a modest increase to the JobSeeker rate, cheaper GP visits and flagged record increases to migration as Treasurer Jim Chalmers unveiled the first Labor budget surplus in 15 years.

In his budget reply speech last night, opposition leader Peter Dutton signalled the Coalition would campaign for increased support for the gas industry and the development of a domestic nuclear industry, while slamming the government for stoking inflation with a big-spending budget.

Meanwhile, the Greens and Coalition continue to hold up the government’s signature housing policy in the Parliament, with debate set to resume again next month.

Government claims symbolic surplus

In a strong turnaround of economic fortunes since Labor’s first budget in October last year, the Treasurer on Tuesday announced a $4.2 billion surplus for 2022-23.

The bottom line improvement was thanks to high commodity prices, low unemployment and wage growth, but the budget heads back into the red from next year with a forecasted $13.9 billion deficit. This trends downwards until 2025-26 where it is forecast to hit $36.6 billion.

A $14.6 billion cost of living package was aimed at supporting vulnerable Australians struggling with rising energy bills and inflation, including power bill relief for five million households and a $4.9 billion boost for JobSeeker recipients.

The opposition immediately claimed Labor’s package and broader budget decisions would have an inflationary impact on an already volatile economy, saying they would be at fault should the RBA move to hike interest rates further next month.

Peter Dutton last night refused to pledge support for the $40 a fortnight JobSeeker increase, proposing instead an increase to the amount of income recipients can earn before it affects their payment, but is set to wave through most of the government’s cost of living measures.

Multi billion dollar Medicare boost

The biggest ticket item not announced before the budget was handed down on Tuesday night was a $3.5 billion boost to Medicare’s bulk billing incentive for children, pensioners and concession card holders.

It was part of a $5.7 billion spend on improving access to and reforming primary health care, which also included payments to enhance multidisciplinary care, investments in digital health and training and workforce incentive programs.

The government also committed an additional $360 million to the delivery of it’s signature Urgent Care Clinics, on top of a $135 million election commitment.

Becoming a ‘renewable energy superpower’

The Albanese Government will spend $4 billion on Australia’s energy transition, half of which has been allocated to a ‘Hydrogen Headstart’ program to support new renewable hydrogen projects.

In his budget reply speech last night, the opposition leader put energy policy at the centre of the Coalition’s platform for re-election – calling for increased investment in Australia’s gas industry to support the country’s transition toward renewables.

He also made the case for nuclear power, signalling the Coalition may seek a mandate to explore the viability of small onshore reactors at the next election.

Supporting the creative economy

Australia’s creative industry will get a much-needed boost with the government increasing the Location Offset to 30 per cent. This increase will encourage more international film and tv productions to be made down under and will provide employment for thousands of Australians and opportunities for small businesses.

The previous model, introduced by the Coalition, was a mix of tax and incentive funding, however the 30 per cent now provides certainty and stability for the industry.

Ausfilm states that over the past five years, 40 international productions have been secured for Australia generating over A$3.28 billion in private investment, 22,200 employment opportunities and work for over 23,500 Australian businesses. The Location Offset increase will help this important industry to continue to grow and contribute to a vibrant domestic arts sector.

Tourism tax changes

With almost one million Australians employed in the tourism industry, it is one of the most vital sectors of our economy. That’s why tourism industry associations and stakeholders were shocked to see a $10 increase to the Passenger Movement Charge (PMC) in Tuesday night’s budget.

The PMC is charged to pay for border processing, however stakeholders estimate that in the three years prior to the pandemic, it collected on average $811 million more than border processing costs with the additional funds returned to consolidated revenue. The $70 PMC will increase the government’s revenue by $1.3 billion.

In this post-COVID world where international visitor numbers are still struggling, some tourism industry leaders have labelled this increase a ‘tourism tax’ and warn of the harm it will cause to the thousands of small businesses in the tourism sector.

Speaking of small business…

Small businesses struggling with higher business costs due to inflation, crippling energy bills and a skills crisis were looking to the government for support on Tuesday night, but barely rated more than a passing mention.

Prior to the budget the government announced a 20 percent tax incentive to encourage small businesses to invest in ‘energy-efficient’ systems and some small businesses will qualify for the ‘energy price relief’ payment.

But with the government spruiking the $20,000 instant asset write-off as a win for businesses, small business owners will be less likely to invest in the growth of their business as the government chose not to extend the COVID-era $150,000 asset value limit.

What you may have missed in Parliament this week

While this week’s sittings were dominated by the budget and budget in reply, the Senate was locked in heated debate on the government’s housing affordability bill.

Yet to secure the support of the Greens, and with the Coalition opposing the legislation, the government has been forced to postone discussion of the bill until the senate sits again in June. The Greens are still demanding increased investments in social housing and rent freezes in exchange for their support.

The Coalition and some lower House crossbenchers have voted against the government’s family law reforms, urging a committee to examine the consequences of abolishing the court’s presumption of shared responsibility when settling family law disputes.

The Family Law Amendment Bill 2023 passed the House with Labor’s majority but will face further scrutiny in the Senate.

House of Representatives Standing Committee on Health, Aged Care and Sport chair Dr Mike Freelander presented the committee’s report on long COVID, which highlighted ongoing information and data gaps in relation to the identification and treatment of long COVID.

The government has committed $50 million from the Medical Research Future Fund towards long COVID research, in response to the report.

Parliament resumes on 22 May for Budget Estimates and lower House sittings. The Senate next sits on 13 June.