The Federal Budget is widely seen as a not-too-subtle election budget, with no new taxes, spending incentives for SME businesses, significant spending on infrastructure and health care, and increased funding for the ATO’s Tax Avoidance Taskforce.
Regarding infrastructure, this budget was consistent with expectations. It further increased infrastructure spending from $75 billion to $100 billion for the building of road, rail and air infrastructure.
With the increasing number of infrastructure projects being delivered nationally, this places further pressure on the construction industries to find skilled workers. An additional $525 million has been allocated towards the funding of 80,000 new apprenticeships, which will assist with alleviating some of these skill shortage pressures.
For the health sector, $100 million was allocated to upgrading existing health infrastructure and a further $1.3 billion allocated to support patient care in the community, which will reduce the pressure on hospital services.
There was no change to existing Government policy in relation to housing. The Treasurer referenced in his speech the National Housing Finance Investment Corporation and its recent $300 million bond raising. This bond will offer cheaper finance for Community Housing Providers to deliver 300 new affordable rental dwellings. There was no reference to matching Labor’s current election proposal to deliver 250,000 new affordable homes.
With an estimated 47,000 job vacancies in regional Australia and the absence of affordable housing to accommodate potential key workers, targeted investment in affordable housing infrastructure would be an additional avenue to support the Federal Government’s budget surplus strategy. The increased focus on economic infrastructure projects is a real positive. There is still a real need for growth in social infrastructure projects, delivery of which will – at least in the short term – continue to fall predominantly to the States and the Community Housing Provider sector.
You can read more of our Federal Budget commentary here.