Finance Finance News Cash handouts for millions, fuel excise cut: Frydenberg’s 2022 budget
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Cash handouts for millions, fuel excise cut: Frydenberg’s 2022 budget

Cost of living to be the focus of pre-election budget

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Treasurer Josh Frydenberg is just hours from unveiling his 2022 federal budget – with cash handouts of $250 for millions of Australians, and cuts to fuel excise widely expected to be key features.

In his final appearance before he hands down his fourth budget later on Tuesday, Mr Frydenberg said cost of living relief would be a key feature of the pre-election budget.

He said it would include changes to ease living costs temporarily and provide a long-term plan for the economy.

“Tonight’s budget delivers for Australian families, for seniors, for small businesses with cost-of-living relief now in a temporary, targeted and responsible way,” he said in Canberra on Tuesday.

Mr Frydenberg is also pitching the budget as a long-term economic plan providing skills, building more roads, funding national security, driving down the cost of energy and rolling out essential services.

He confirmed on Tuesday morning it would forecast the unemployment rate dropping to 3.75 per cent by the September quarter this year, its lowest level in almost 50 years.

“This is a remarkable achievement that belongs to 26 million Australians,” Mr Frydenberg said.

The Australian reported on Tuesday afternoon that the lower jobless rate would aid in slashing $11 billion from the nation’s welfare bill over the next four years.

It said Mr Frydenberg would declare an end to “crisis spending”, with 701,000 fewer people on welfare payments and 1.2 million more Australians in work since the height of the pandemic.

But the budget is also expected to include one-off payments of $250 for millions of Australians who earn less than $126,000 a year. The Sydney Morning Herald reported on Tuesday that the handout would be in lieu of an extension to the $1080 tax offset.

A cut to the fuel excise is also expected, to force the price of petrol back below $2 a litre. The cut is tipped to be between 10 and 20 cents a litre, and last for six months.

“There are real pressures right now on Australians. It’s the No.1 topic around the kitchen tables,” Mr Frydenberg said.

Prime Minister Scott Morrison told Parliament that Tuesday’s budget was one “Australians have worked hard for”. He said Australians had made “great sacrifices” in the past three years, having faced fires, floods and the pandemic.

But Opposition Leader Anthony Albanese said that while Labor would not stand in the way of the handouts, the timing was suspicious ahead of the looming election.

“What we need is a plan for the economy, not a plan to get the Coalition a fourth term in office,” he told ABC Radio National on Tuesday.

“That’s all we’re seeing from this government – it’s long on politics and short on plans.”

Mr Albanese said the government did not have a long-term plan for easing cost-of-living pressures in the future.

He said Labor’s plan, if it won government, included raising wages, easing childcare costs, and introducing productivity-boosting measures such as free TAFE to up-skill workers.

Mr Morrison is expected to trigger a May election after letting the dust settle on the Coalition’s post-budget pitch.

The government hopes to use the budget as a political springboard for the upcoming federal poll.

In addition, the budget will include $49.5 million to be spent over the next two years on additional subsidised vocational education training places.

The new places can be accessed by those working in the aged care sector or those interested in working in the area.

The budget deficit is expected to be lower than the $98.9 billion estimated for 2022/23 in last year’s mid-year budget review.

Swathes of money have already been set aside for infrastructure projects, with more than $120 billion to be spent over the next decade. The government has also remained coy about $16 billion set aside in the mid-year accounts for “decisions taken but not yet made public”.

It has already announced an extension of the 50 per cent reduction in minimum drawdown requirements until June 30 next year for self-funded retirees.

The home guarantee scheme has also been extended to 50,000 places a year.

Mr Albanese will deliver his budget reply speech on Thursday night.

-with AAP