Financial experts predict a Budget that will aim to deliver repair, restraint and, hopefully, some relief, as the government responds to the pressure of inflation. But what will it deliver for older Australians?
But according to CommBank’s 2023/24 Budget preview, the federal government faces “the difficult challenge of meeting multiple goals”, says CommBank chief economist Stephen Halmarick.
These being namely “maintaining fiscal discipline to assist monetary policy in bringing inflation back to the 2 to 3 per cent target range, providing some targeted relief to cost-of-living pressures, putting in place new arrangements to reverse the projected blowout in spending on a number of large programs, implementing the AUKUS defence policy priorities, further developing climate change policies, implementing some tax reform and moving the medium-term budget outlook onto a more sustainable footing”.
The report, released 1 May, forecasts a significant reduction in the 2022/23 budget deficit. Mr Halmarick also predicts a bottom line of approximately $5 billion (0.2 per cent of GDP) – numbers that sit well below the previous estimate of $36.9 billion (1.5 per cent of GDP).
What else can older Australians expect in this year’s Federal Budget?
Aside from restraint and relief, other key areas of focus are set to include changes to the superannuation system, healthcare, and aged care.
According to Mr Halmarick, potential policy/spending initiatives in the 2023/24 Budget may include:
- relief to household utility bills
- a significant increase in defence spending
- NDIS reform and restructure
- updates to the cost of Stage Three tax cuts.
When it comes to the impact on older Australians, National Seniors Australia will be watching closely to see if the federal government delivers support and positive change related to the 12 recommendations within six key priorities outlined in its own 2023/24 Budget submission.
Six key priorities for older Australians
- making the retirement income system stronger
- fixing pension poverty
- mobilising the workforce
- A home, not an aged care home
- funding aged care
- investing in future generations.
Within those key areas, some of the 12 recommendations laid out by National Seniors Australia include:
- exempt work income from the income test for all government payments to boost workforce participation, income and savings
- establishing an Independent Pension Tribunal and increasing the maximum rate of the Commonwealth Rent Assistance (CRA)
- providing 2000 mature age home care traineeships per year to help meet demand for workers
- allowing people on the cusp of entering residential care the option of downsizing to a smaller, age-friendly home by exempting excess sale proceeds from the assets test
- creating a dedicated Home Care Loans Scheme to fund additional aged care and support
- allowing older Australians to invest in renewable energy infrastructure projects by issuing Clean Energy Bonds
- increasing Age Pension gifting limits to help the younger generation.
Will the Budget respond to demands for older Australians?
Waiting to see if Labor will aim to spend or save – and what that means for older Australians – is less than a week away, when federal Treasurer Jim Chalmers reveals the reality of the new Budget on 9 May.
The October 2022 Budget appeared to be a repeat of election promises made, including the offer of increased access to the Commonwealth Seniors Health Card, a reduction in the downsizer superannuation eligibility age to 55, as well as an extension of the assets test exemption for downsizers (to two years) and the promise that there would be an increase in Age Pension Work Bonus limit of $4000.
Seeing how the May Budget responds to ongoing inflationary pressures that continue to push up the cost of goods and services is an important test for Labor – and one older Australians will watch closely.
Age Pension reforms
With staff shortages across a range of sectors, calls to remove the disincentives for those who want – and need – to work is an important issue for many Australian pensioners and one that many hope the new Budget will address.
Affordable housing and home care
Doing more to address housing supply and cost issues is also critical.
For older homeowners who need additional care and support as they age, exempting the home sale proceeds from the Age Pension assets test is another policy aimed at offering meaningful support for those who want to age in place rather than in residential aged care.
Older Australians hope for a Budget that lets them give back
For many older Australians, seeing what the upcoming Budget holds is not just about what’s in it for them, but also about ways they can actively give back, by contributing to a more sustainable future for all Australians.
Whether the Budget will reveal ways older Australians can invest safely in the infrastructure needed to help reduce emissions and stabilise energy prices is something that National Seniors Australia believes is also important. But with so little information leaked ahead of this Budget (unlike many previous Budget announcements), it’s a case of waiting and watching until 9 May.
What would you like to see for older Australians – and all Australians – in the upcoming Federal Budget? Why not share your thoughts in the comments section below?
Also read: Do I have to tell Centrelink about my superannuation?