This year’s budget required the Labor Government to balance their natural inclination towards greater expenditure on public services against the detrimental impact that growth in spending could have in counteracting the fight against inflation.

In 2022/23 (the current financial year) the Government had higher expenditure than expected, however growth in spending was far less than growth in revenue. Higher resource prices, high rates of employment, rising wages, and higher corporate profits all contributed to a windfall on the revenue side of the ledger, which provides the first budget surplus since the mid-2000’s.

The revenue windfall provided for a modest surplus of $4.2 billion in the 2022/23 financial year. This is a remarkable turnaround when compared to the $37.9 billion deficit projected in this Government’s first budget just seven months ago. It is customary for a new government to use their first budget ‘clear the decks’ and to use the platform to blame any issues on their predecessors. However, a revision of such magnitude within such a short period is damaging for the credibility of the budgeting process.

There is some truth to the opposition’s claim that “a drover’s dog could have achieved a budget surplus” in these circumstances, but exercising restraint in the face of vocal demands for increased spending requires fortitude on behalf of the Treasurer. Like someone who won the lottery, many a worthy cause would have been knocking on the door with a proposal to spend the unanticipated windfall. At this stage, it appears that the Treasurer is balancing the competing demands, but the road to budget repair is a long one.

Housing measures in this year’s Budget:

Despite housing costs being a prominent issue, housing was not a key focus of this year’s budget. The Government’s housing agenda is focused on getting the enabling legislation relating to measures announced in the October 2022 budget through parliament (establishing the Housing Australia Future Fund etc.), which is currently being blocked by cross bench Senators.

The housing measures in this year’s budget are predominantly amendments to existing policies, with a couple of new ones. The measures introduced this year include:

• Support to grow the Build-to-Rent market
• Broadening eligibility criteria for the Home Guarantee Scheme
• Addressing the rise of silicosis in workers and develop a national strategy for the prevention of silicosis and silica-related diseases
• Increase in the guaranteed liability cap for the Affordable Housing Bond Aggregator
• An increase in the rate of Commonwealth Rent Assistance
• Improving the Nationwide House Energy Rating Scheme (NatHERS)
• Establish the Household Energy Upgrades Fund to improve energy efficiency of existing homes. 

For more detail about these policy measures and others relevant to the housing industry see HIA’s 2023-24 Budget Brief.