Australian Government’s 2022-23 Budget delivers for many but reform still needed over long-term

Elayne Grace

The Federal Government’s 2022-23 Budget, delivered tonight by Treasurer Josh Frydenberg, outlines measures to guide Australia’s economy to continued prosperity but longer term public policy changes will eventually need to be addressed, the Actuaries Institute said.

It said the Government delivered a budget that reflected the strength of the economy, seeking to reduce the high debt burden while addressing immediate cost of living pressures for low-income earners and retirees.

The Actuaries Institute welcomed the digital economy package outlined in the Budget, tax offsets and cost of living payments, and limited changes to superannuation.

“Specific policies designed to deliver better outcomes for women, low-income earners and retirees will improve equity for all Australians,” said Actuaries Institute President Annette King. “But more needs to be done on climate change, and mitigation for those in flood and fire prone areas.”

Ms King welcomed policies centred around Australia’s digital economy and changes to employee share ownership schemes that will benefit start-ups, measures she said would result in “greater business and professional innovation”. The Institute urges the Government to be ambitious in seizing the opportunities of the digital and data revolution.

The Institute commended the Government’s digital economy announcements:

• $1 billion Technology Investment that provides a tax deduction bonus to small businesses that digitalise their operations
• $18.6 million to protect Australia’s national interest in critical and emerging technologies standards
• $3.9 million to support women in mid-career transitions to the tech workforce.

Ms King added, “While the budget is dominated by hip pocket measures which might correctly be viewed through an electoral lens, it does also meet most of the fairness and equity objectives that the Institute looks for when assessing major public policy announcements and programs.”

The Actuaries Institute strongly supports the $6.7 million for ongoing encouragement of women in STEM, and $3.9 million to support women in mid-career transitions to the tech workforce. “We also welcome the Government’s commitment to narrowing the gender pay gap and the gender superannuation gap by continuing to support increased workforce participation; this has long been a priority of the Institute. However, the lack of announcement to pay SG on paid parental leave continues to disappoint,” Ms King said.

Actuaries Institute Chief Executive Elayne Grace said that a more robust and effective retirement income system that better links public and private sectors, along with sound and accessible advice for retirees, should be central to the Government’s longer-term agenda.

“This is crucial for the wellbeing of all Australians,” Ms Grace said. “The objective of the retirement system must be to provide for retirees so that they have a reliable, secure and adequate income, to live with dignity in retirement.”

“For many years superannuation and retirement settings have been subject to frequent and significant changes. A period of consolidation to implement the already significant reforms underway, including the ongoing adaptation to the Your Future, Your Super changes (especially the ‘performance test’) and introduction of the retirement income covenant from 1 July 2022 is welcomed.”

The Institute also welcomes the announcement earlier this week the Government will consult to ensure the non-arm’s length expenditure and income rules will operate as originally intended and not disproportionately affect superannuation member balances.

“The Institute notes the Budget emphasises significant spending on disaster recovery over proactive investment in resilience, mitigation, and adaptation measures to reduce such future outlays.

“While this is necessary in the current environment in which many Australians have very recently been impacted by natural disasters, greater investment in resilience measures is necessary for long-term sustainable impact,” Ms Grace added.