All eyes were on Federal Treasurer Jim Chalmers on Tuesday night as he handed down the budget for 2023-24. Against a backdrop of high inflation, rising cost of living, low unemployment and stagnating wage growth, onlookers hoped the budget would provide some relief for ordinary Australians and a plan to steady the economic and fiscal ships. 



While the budget’s heralded $4 billion surplus might be mainly the result of a bit of smoke and mirrors, there were promising signs for some industries while perhaps a little left to be desired in other areas. Here we run down some of the key takeaways from budget 2023-24. 

Defence 

After significant gains in recent years, defence continues to be an area of growth for federal government spending. Defence funding as a share of the economy is expected to grow from 2.04 per cent now to 2.3 per cent by 2033. 

This budget announcement kicked that growth off with $19 billion to be spent over the next four years on “nuclear-powered submarines, long-range strike capabilities, strengthened northern bases, workforce growth and retention, innovation, and regional partnerships”. 

The nuclear-powered submarines program has for some time been the flag-bearer for defence spending in the short and medium-term, and that continues to be the case. As part of the Aukus deal, $4.5 billion over 10 years will go towards supporting “the initial steps in Australia’s acquisition of a conventionally-armed, nuclear-powered submarine capability”. 

Developing a workforce with the necessary skills will be a key part of this program. Notably, Chalmers announced 4000 additional commonwealth-supported places will be created over the next four years, at a cost of $127 million, “for courses that support the skills requirements of the nuclear-powered submarine program, including STEM and management disciplines”. 

Infrastructure 

A number of high-profile infrastructure projects funded by the budget promise to stimulate the economy and create jobs across engineering, construction and more. 

Notably, the budget confirmed the $240 million of federal funding that had been previously promised for the new sports stadium at Hobart's Macquarie Point – a key plank of the AFL’s strategy to bring a Tasmanian team into the national league. Also $3.4 billion has been earmarked over the next 10 years for the construction or refurbishment of venues for the Brisbane Olympics and Paralympics. That figure includes $2.5 billion for the new Brisbane Arena. 

Overall, federal spending on infrastructure remains somewhat in flux. A 90-day independent review has been announced for the $120 billion Infrastructure Investment Program, with a number of significant projects in the program’s 10-year rolling pipeline – notably the long-discussed Melbourne Airport rail connection – now being subject to that review. 

Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King has described the review as a responsible move to address a growing backlog of projects. “This review will allow all levels of government time to consider the projects that are actual priorities,” she said, “and assess their cost and deliverability in the current climate.”

So even if some of the detail is yet to be locked in, infrastructure clearly continues to be a priority for economic stimulus. Other notable announcements include: $200 million to replenish the Major Projects Business Case Fund; $200 million over two years for the Thriving Suburbs Program and $150 million for an urban Precincts and Partnerships Program under the National Urban Policy; and around $170 million of new funding towards various national road safety projects. 

IT and cybersecurity 

We’ve talked previously about how the so-called “tech wreck” might not be all doom and gloom, despite massive lay-offs that have been seen in the tech industry globally. The 2023-24 budget contained a number of items that spell opportunity for Australian IT companies and professionals, including those in software engineering, cybersecurity, and research and development. 

In particular, $468.8 million is being sent the way of Asis, Australia’s overseas spy agency, over the next four years, to support them to “modernise” their operations. Enhanced cyber-savviness is expected to be a main tenet of this modernisation. 

There are also a number of initiatives designed to crack down on scammers and spammers. The headliner here is the announced $58 million national anti-scam centre. That sits alongside a $17.6 million injection to help the Australian Securities and Investments Commission target phishing websites and other online investment scams. 

An SMS sender ID registry (budgeted at $10.9 million) will also be established to help stop scammers from spoofing industry and government brand names. 

Health 

The big-ticket item for health was the record $3.5 billion investment in Medicare. The boost essentially triples the bulk billing incentive for concession card holders and children under 16. 

This move is designed primarily to enhance the role of GPs and ensure people with limited resources can access GP services. But thriving general practices are about more than just GPs. They often employ multidisciplinary teams that can include nurses, allied health professionals, managers and administrative support staff, all of whom would benefit from increased patient flow. 

An additional $445.1 million was also directed to the Workforce Incentive Program. The program provides financial incentives to encourage doctors to work in regional, rural and remote areas, and supports medical practices to employ more nurses and allied health professionals. 

A further $91.1 million was earmarked over the next two years for the development of the Australian Centre for Disease Control (CDC). With Australia’s growing reputation as a global life sciences hub, the CDC will likely further broaden the range of opportunities for professionals across a spectrum of health research, policy and communications backgrounds. 

Other health-related measures include funding to provide aged care workers with a 15 per cent pay rise, and $10.5 million to fund mental health programs for First Nations people during the period of the referendum on the Indigenous Voice to Parliament. 

Wages 

Currently, wages growth is tracking at about 3.8 per cent for the 2022-23 financial year. This is projected to climb to 4 per cent for 2023-24. The associated increase in income tax revenue accounts in part for the surplus in the federal budget. But how does this apparent acceleration in wages growth translate in everyday terms? 

The short answer is, it’s not great. In fact, considered in the context of inflation and rising cost-of-living, it amounts to an effective loss in real wages, despite the still very low unemployment rate. 

According to the Guardian’s Greg Jericho, the outlook for wages remains modest at best. “The budget figures suggest that by June 2027 wages will still be 2.5 per cent below where they were in June 2020,” he writes, “and in real terms will only be at the level they were in 2014.” 

That means that despite some of the other measures aimed at reducing cost of living pressures – including funding aimed at boosting welfare and energy relief – household budgets are likely to remain tight at least for the next few years. 

The slow growth in wages means many employers are focusing on enhancing their total rewards package. That’s a good strategy for employee attraction and retention under any circumstances. Nonetheless businesses and individuals alike will be hoping present budgetary and fiscal policies aimed at arresting inflation will make an impact sooner rather than later.