Your governance and risk guide to the 2023 Federal Budget
A major funding injection of more than $45 million for stronger privacy and protection enforcement announced in tonight’s federal budget has been welcomed by Governance Institute of Australia as a significant investment in crucial reforms.
The Federal Government has also announced funding to support a standalone Privacy Commissioner to progress investigations in response to recent high-profile data and privacy breaches.
Governance Institute CEO Megan Motto said building trust among Australians in the digital economy should be a key priority of the new Commissioner.
‘It is clear that Australia’s privacy regulatory framework is out of date and urgently requires reform,’ she said.
‘Building commercial and consumer trust is necessary for our successful participation in the global economy.’
The Institute also welcomes funding of $8 million for the establishment an Anti-Slavery Commissioner to support compliance with the Modern Slavery Act 2018 and to improve transparency in supply chains.
‘We advocated for an appropriately resourced independent commissioner to provide the necessarily leadership in the ongoing development of the regime. We hope that the Commissioner will provide guidance and work with business to improve due diligence practices.’
A general increase in funding for addressing one of the major structural issues in the aged care sector, namely staff salaries, is also welcome. It is pleasing to see the Government building on the 2022/23 October Budget measures for the sector including implementation of the Aged Care Royal Commission recommendations which shone a much needed spotlight on the governance failings of the sector.
The budget’s slim surplus – the first in 14 years – is welcome but will be short-lived if a more robust plan for Australia’s socioeconomic sustainability is not developed. Ms Motto said the better than expected result could be put to best use by implementing a broader structural reform agenda.
“Issues to do with property affordability, workforce participation and tax reform need to be addressed as a matter of urgency,” Ms Motto said.
Your governance and risk guide to the federal budget
In this special edition of News Update, we outline the major governance and risk management announcements in tonight’s budget and what they may mean for you.
We drill down on the Treasurer’s announcements on the economy, cost-of-living relief, health and aged care spending and climate change.
Budget 2023: overview
The Albanese government has unveiled its 2023 budget, based on five themes – cost-of-living relief, investing in Medicare and the care economy, breaking down the barriers of disadvantage, embracing clean energy and value-added industries, and achieving budget surplus this financial year and smaller deficits in the future.
It’s the first full budget from the government which was elected 12 months ago, and its centrepiece is a surprise budget surplus for this financial year, as well as spending to relieve cost of living pressures.
The government’s budget includes the following:
- $14.6 billion in cost-of-living support over the next four years, which includes money for energy price relief, rental assistance and expanded income support for people out of work.
- A $5.7 billion funding boost for Medicare, including a tripling of bulk billing incentives for GPs. That’s designed to reduce the cost of visiting a doctor for millions of Australians.
- There is also a $2.2 billion package designed to help fix primary healthcare services and take pressure off the hospital system.
- Big gas producers will have their tax deductions capped and face tougher compliance measures, which is forecast to raise $2.4 billion over four years.
- Single parents will get higher welfare payments until their youngest child turns 14.
- The long term unemployed over the age of 55 will receive slightly higher JobSeeker payments, while there’s a $40 a fortnight increase to the unemployment benefit, Youth Allowance and Austudy.
- The National Disability Insurance Scheme’s growth rate will be cut to 8 per cent by July 2026 from the current 13.8 per cent.
- Earnings from superannuation balances over $3 million will be taxed at 30 per cent, up from 15 per cent, and businesses will be required to pay workers superannuation contributions every payday.
- Excise on tobacco products will increase by 5 per cent while the planned pay rise for aged care workers will cost $14.1 billion over forward estimates.
The budget bottom line for this financial year – a surplus of $4.2 billion – is built on lower welfare payments and higher mining tax receipts. But it’s a one-off surplus, with deficits of $13.9 billion and $35.1 billion forecast over the next two fiscal years. Commonwealth debt will rise to $1.1 trillion by June 2027, with no forecasts on budget surpluses beyond this year.
Federal Treasury expects the Australian economy to outperform all major advanced economies, although concedes the economy is slowing in response to the deteriorating global economy, high inflation and higher interest rates.
Real economic growth is expected to slow to 1.5 per cent next financial year before recovering. Inflation is past its peak, according to Treasury’s forecasts, and will head towards 3.25 per cent by the end of the next financial year. The government’s cost-of-living relief, notably lower energy prices, will take 0.75 percentage points off inflation. The unemployment rate is likely to head towards 4.25 per cent over the next 12 months.
To reduce the prevalence of scams, the Government allocated $46.5 million over 4 years to establish the Coordinator for Cyber Security to ensure that the Commonwealth’s cybersecurity efforts are strategic, coordinated, timely and effective.
The coordinator will be supported by the National Office of Cyber Security and dedicated resources from within the Department of Home Affairs and other Commonwealth entities, with capacity to surge further in the event of a cyber incident.
This will boost the Australian Securities and Investments Commission’s work to disrupt investment scam websites and establish Australia’s first SMS Sender ID Registry to prevent scammers imitating trusted brand names.
The Government is providing $44.3 million to the Office of the Australian Information Commissioner to take appropriate regulatory action, enhance its data and analytics capability, and support a standalone Privacy Commissioner.
It is also investing $23.4 million to help small businesses build their resilience to cyber security attacks by training in-house cyber wardens. The government hopes that this will help mitigate and reduce the harms associated with cyber attacks on small business. The small business Cyber Wardens program will be delivered by the Council of Small Business Organisations Australia.
Finally, the Government will provide an additional $134 million over 4 years for the Office of the eSafety Commissioner to continue to support Australians online, including through enhanced educational, outreach and investigatory activities.
The federal government will appoint a dedicated privacy commissioner to deal with the increasing threat of data breaches.
The government also promises $44 million over four years for the restored Office of the Australian Information Commissioner to support a standalone Privacy Commissioner, progress investigations and enforcement action in response to privacy and data breaches and enhance its data and analytics capability.
There is also $900,000 over two years for the Attorney-General’s Department to progress the Government’s response to the recent review of the Privacy Act 1988 and to support a separate independent statutory review of part of the Act.
The Government is also investing $26.9 million in 2023 24 to expand Digital ID – helping to increase efficiency and consumer protection, reduce fraud, and make it easier for people to access services online.
The government outlined a significant clean energy package aimed at supporting the development of a domestic hydrogen industry and assisting households lower carbon emissions.
The $2 billion Hydrogen Headstart program will subsidise producers to accelerate development of renewable hydrogen projects and help connect Australian businesses to the global hydrogen supply chain.
Households will also be funded to make the transition to net zero with a $1 billion-plus fund to support energy-efficient home upgrades, including a partnership with the private sector to provide low-cost finance and mortgages for home upgrades that save energy.
Overseeing it all is a newly established National Net Zero Authority that will guide the economy’s transition to clean energy. The authority will work with all levels of government to ensure workers are supported and new industries come online.
Separately, the government will develop an assessment of the risks to Australia from climate change and invest in a plan to adapt to those risks.
In other climate-related measures, data centres and warehouses will become eligible for the withholding tax concession offered to managed investment trusts that hold energy-efficient assets, while the minimum energy efficiency required for a building to be considered ‘clean’ will be raised to a 6-star rating.
The Government will provide $8 million over 4 years from 2023–24 (and $2 million per year ongoing) to establish an Anti-Slavery Commissioner to work across government, industry and civil society. The role will support compliance with the Modern Slavery Act 2018, which has a goal to improve transparency in supply chains and help fight modern slavery in Australia and abroad.
Integrity measures incl. Whistleblowing and Federal Judicial Commission
The Serious Financial Crime Taskforce and Serious Organised Crime program are being merged and funding extended for another four years. The SFCT and SOC are currently separately funded ATO-led cross-agency collaborations that target serious and financial crime and tax evasion.
Workplace culture and diversity and inclusion
Women’s safety is in focus with funding of $327 million over 4 years for initiatives under the National Plan to End Violence Against Women and Children, including improving frontline service delivery and extending access to the Escaping Violence Payment.
The Government is also aiming to harmonise sexual assault and consent laws, address barriers to justice and improve the family law system to achieve better outcomes including for victim-survivors.
Some $27 million over 4 years will be provided to improve the safety and fairness of workplaces. This includes the establishment of a National Construction Industry Forum to advise on workplace relations, industry culture, skills and training, safety, gender equality and productivity in the construction industry and the development of a targeted training package on workplace psychosocial hazards.
The government has allocated $101.2 million over 5 years to support the development and uptake of technologies that are enabling capabilities across Australian industries. It will commence in quantum and artificial intelligence. It will also extend the National AI Centre and its role supporting responsible AI usage and will create an Australian Centre for Quantum Growth to connect and amplify Australia’s quantum ecosystem.
The Temporary Skilled Migration Income Threshold is being raised from $53,900 to $70,000 from 1 July 2023. The TSMIT is the level at which employers can sponsor a foreign worker to fill a local position.
The federal government has put national financial well-being at the centre of its 2023 budget. Some of the key initiatives to reduce cost of living pressures include a partnership between state and territory governments to deliver up to $3 billion of electricity bill relief for eligible households and small businesses.
The Government is investing $3.5 billion over 5 years to make it easier and cheaper to see a doctor and strengthen the foundations of Medicare.
The Government will invest $1.9 billion over 5 years in more support for eligible single parents who are the principal carers, 91 per cent of whom are women.
In September, eligible single parents will receive Parenting Payment (Single) until their youngest child turns 14 (currently up to 8 years old).
Around 57,000 single principal carers, including 52,000 women, and around 110,000 children will benefit from the higher rate.