Federal Budget Insights FY22-23

Federal Treasurer Jim Chalmers is playing the long game with his first Budget under the new Government - and also with some tough decisions that appear to have been left for next time.

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.

The standout measures include $20 billion to upgrade Australia’s electricity grid to connect with renewable energy sources; a National Housing Accord which aims to build one million new houses over five years from 2024; more TAFE and university places; and reforms to childcare and paid parental leave. There will also be cheaper medicines and support for communities impacted by natural disasters.

The economic conditions remain challenging. Growth will slow, inflation will remain above the RBA band for some time, unemployment and interest rates will rise.

The FY22-23 deficit is forecast at $38 billion with net debt at 23% of GDP. However, this is as good a result as can be expected, given the conditions.

Going forward, though, there are going to be some tough decisions that the Government has yet to make. The rising share of the Budget claimed by social and human services, including NDIS, is not sustainable. How will the Government address these needs while ensuring its election and Budget commitments can be met?

Great effort at reform will be needed. There’s a lot of work to be done before the next Budget.

Read our detailed tax analysis and insights

Net debt remains below 30% of GDP

while gross debt is lower than it was in the March budget. This means the Australian economy is still comparatively stronger than many other countries’ economies.

Repurposed spending to fund new initiatives

Nearly $30 billion of spending outlined by the former government was repurposed and used elsewhere. The Government was also able to bank windfall commodity revenues. As a result, the Government is paying for its signature election commitments with a negligible impact to the bottom line.

Hear from our experts on their first reactions to this year's Budget

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Multinational tax reforms confirmed

The Budget delivers on the Government’s pre-election commitment to implement a package of measures focused on multinational business tax reforms - some of the most significant and far-reaching tax integrity measures we’ve seen in years.

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Rewiring Australia for our energy transition

The Budget’s pragmatic approach to the net zero agenda makes available $20bn of financing to upgrade Australia’s electricity grid, connecting it to renewable energy sources.

Season Two: Asia Pacific's Just Transition

There's an increasing call to action to ensure that the shift to net-zero is fair and inclusive. In this second season, we'll be exploring how stakeholders can achieve an environmentally sustainable global economy, while also ensuring no one gets left behind. 

We have a great lineup of speakers covering topics from energy, justice and human rights, to community resilience and workforce transformation.