The cost of living measures in the 2023 Federal Budget will give relief to vulnerable families and individuals, including migrants and refugees.

The budget includes more funding for Medicare which will see $5.7 billion spent on lowering the cost of visiting a doctor.

Treasurer Jim Chalmers also announced a $40 a fortnight rise in the Jobseeker rate as wells as subsidised energy bills worth up to $500 for more than five million eligible households.

The rise in the Jobseeker rate comes on top of $4.7 billion over four years to deliver cheaper child care already announced.

The federal government has already announced reform of Australia’s immigration system, including reducing the number of visa categories, providing more support for migrants after arrival – including preventing worker exploitation – and speeding up the visa application process.

Also announced was a three-tiered assessment system designed to cut red tape and reduce delays to permanent residency and the ability for all skilled temporary workers currently in Australia to apply for permanency as well as an increase in the temporary migrant income threshold from $53,900 to $70,000.

The budget revealed that international university graduates with eligible qualifications from Australian institutions will be able to work for an extra two years post-study from 1 July 2023 in a move the government hopes will strengthen the pipeline of skilled labour.

But international student visa holders will have a cap on their working hours reinstated from 1 July 2023, after it was removed during the COVID-19 pandemic, but it will be increased from pre-pandemic levels to 48 hours a fortnight.

Students working in aged care will be exempt from the cap until 31 December 2023.

What else is in the budget?

Welfare

Single parents

The government will scrap the ParentsNext program, which will end compulsory mutual obligations for about 100,000 parents in the program.

The program was costed at $484 million over the forward estimates but won’t be scrapped entirely until the existing contracts end in the next financial year.

Single parents will remain on the parenting payment until their youngest child turns 14, up from the previous threshold of eight-years-old.

That will mean an extra $176.90 a fortnight compared to the jobseeker payment. But the move is still short of the original threshold of 16.

Jobseeker

The budget contains $4.9bn to increase working age and student income support payments including jobseeker, youth allowance, parenting payment (partnered), Austudy, Abstudy, youth disability support pension and special benefit. This will cover 1.1 million Australians.

The government has also lowered the threshold for older long-term unemployed people to receive a slightly higher base rate of jobseeker, moving it from 60 to 55.

The government will also provide $200 million over six years to address “entrenched community disadvantage”, according to the budget papers. This money will be used to fund specific projects through philanthropic organisations, and fund “place-based initiatives” in some communities.

Cost of living

The total cost of the cost of living package is $14.6 billion over four years. This includes the already announced energy relief for households and small businesses, investments in energy efficiency and cheaper medicines.

The energy rebates of up to $500 will go to 5.5 million eligible households on government payments, and 1 million small businesses. How big a discount you receive on your power bill will depend on the state people are resident in.

Changes to Pharmacy rules mean people will be able to buy two months of certain medications for the price of a single prescription. That is expected to save about $1.2 billion, which the government has said it will reinvest in community pharmacies.

Health

General practitioners will be incentivised to bulk bill more of their patients through a tripling of the fee they receive for bulk billing, at a cost of $3.5bn over five years.

The government has committed to a $2.2 billion primary health care package, which will be the start of the Medicare reforms promised to take pressure off the hospital system.

GPs will have access to a $220 million grant program to expand community primary health care and local services.

The government has also announced $234 million fund to combat vaping, which includes $63 million for an information campaign.

Childcare

The implementation of the cheaper childcare package, passed in November, will see spending on subsidies hit $55.3 billion over the four year budget period and up by $9 billion since the March 2022 budget.

Despite recommendations from the women’s economic equality taskforce and economic inclusion advisory committee, this budget is not expected to abolish the activity test for childcare subsidies.

The budget contains $72.4 million over five years for skills and training of early childhood and care workers.

Aged care

There is an $11.3 billion to fund a 15 per cent pay rise for aged care workers. This will meet the ruling of the Fair Work Commission, which ordered the whole pay rise be delivered at once, overruling the government’s plan to split the 15 per cent over two years. The government hopes the pay rise will attract many thousands of workers to the sector, in an effort to get closer to its promise to staff aged care homes with nurses on a 24/7 basis.

Multicultural Australia

The budget contains $2.5 million to support multicultural media literacy, $15.3 million to establish a PHN Multicultural Access Program to support multicultural communities to access primary care services and $4.7 million to boost COVID-19 vaccination rates in multicultural communities.

There is also $136 million over 4 years from 2023–24 (and $36m ongoing) to support the mental health of survivors of torture and trauma before moving to Australia on humanitarian grounds.

Also included is $10 million over 4 years to expand family violence provisions targeted at temporary migrants. 

The Government will provide $18.6 million to prevent and address sexual violence, and funding will be allocated to support migrant women, including women on temporary visas, to escape violence. 

NDIS

The NDIS minister, Bill Shorten, has promised a fresh crackdown on providers rorting the system and price gouging products and services for people with a disability and sharing information about companies putting big mark-ups on simple products like chairs and walking sticks.

National cabinet last week agreed to a cap on the growth of the scheme, to 8 per cent a year, to keep a handle on rising costs in an effort to keep the system “sustainable”.

The NDIS was the fastest-growing expense in the October budget, outside interest payments on the national debt.

Foreign Affairs and aid

The government has decided to resume annual increases in official development assistance from 2026-27. Those 2.5 per cent annual increases will end up costing $8.6 billion over 10 years from 2027-28. The budget papers also outline a $1.9 billion package spread over five years to expand Australia’s engagement with Pacific Island countries.

Education and training

The government announced it is prepared to invest an additional $3.7 billion for a five-year national skills agreement to be negotiated with states and territories, in addition to $400 million to support another 300,000 fee-free TAFE and vocational education and training places.

A further $492.7 million over five years will be provided for Closing the Gap initiatives including in the areas of infrastructure, employment, justice, education and housing initiatives for First Nations peoples.

Tax

The government has announced it plans to collect $2.4 billion more in petroleum resource rent tax over four years by capping the proportion of PRRT assessable income that can be offset by deductions to 90 per cent.

The government has also agreed to an OECD push for a minimum 15 per cent tax rate and limit on debt-related deductions. These measures are estimated to raise $1.89 billion over four years, estimates that will be updated in the budget.

Health Minister Mark Butler announced that the tax on tobacco will rise by 5 per cent a year over the next three years, raising an additional $3.3 billion over four years.

From 1 July 2025, the tax rate applied to future earnings of superannuation balances above $3m will be 30 per cent. The measure will raise $900 million over the next four years and $3.2 billion over the next five years.