What HR needs to know about the 2023 Federal budget


From a “historic” wage increase for aged care workers to changes to how often you’ll need to pay superannuation contributions. Here’s what HR needs to know about the 2023 budget.

You’d be forgiven for feeling a little overwhelmed at the amount of legislative change coming from the Federal Government in recent months. 

Not only have workplaces already seen a flurry of industrial activity come out of the Fair Work Legislation Amendment Act 2022 (Secure Jobs, Better Pay Bill), but last October’s placeholder budget also saw plenty to digest, including changes to Australia’s parental leave scheme.

The May 2023 budget has revealed even more change for Australia’s business community – so let’s dive in.

Read HRM’s timeline of recent and upcoming changes to come out of the Secure Jobs Bill.

Historic wage increases

As part of what’s being called a “historic” boost to an award wage, those working in the aged care industry can expect an interim 15 per cent pay rise in recognition of the critical work they do supporting Australia’s most vulnerable citizens.

“The Prime Minister has said it many times – the heroes of the pandemic deserve more than our thanks; they deserve fair pay for their vital work,” said Chalmers. 

These workers – the majority (86 per cent) of whom are female – can expect an extra $7500-$10,000 per year as a result of this pay rise, and it will be delivered in one go as opposed to incrementally, as was initially planned.

Chalmers hinted at further wage reforms to come, such as federal approach to criminalising wage theft, standing up for casual workers and acting on the details shared in the Same Job, Same Pay proposal to give greater protection to gig workers.

Read HRM’s article on the Same Job, Same Pay proposal here.

Forecasts also predict a possible widespread increase to real wages across the board from early 2024 due to falling inflation rates. However, some experts suggest this could be short-lived.

Superannuation reforms

Chalmers announced two significant changes to the payment of superannuation. The first is one for the payroll professionals to pay close attention to. 

1. Super guarantee payments to be paid out on pay day, rather than in quarterly instalments, as of July 2026. This gives employees greater visibility over their super payments and a better opportunity to identify any instances of unpaid super or incorrect payments.

Industry Super Australia says this change could save Australians more than $50,000 at retirement due to higher compounding interest from more frequent payments, and “curb Australia’s unpaid super scourge which has cost workers $33 billion over seven years”.

“This budget delivers a big win for the three million mostly young and lower paid Australians unfairly deprived of the super they’ve earned and will give them a better shot at building a good nest egg for retirement,” says Industry Super Australia’s CEO, Bernie Dean.“Payday super gets many younger women what they are owed, but more needs to be done and bridging the gender super gap starts with paying super on parental leave.”

2. A new 30 per cent tax rate was announced for superannuation balances over $3 million, as of 2025.

The Australian Tax Office will also receive support to crack down on unpaid superannuation with a $13.2 million investment into a new compliance system.

Support for women and families

Childcare

The government’s ‘cheaper childcare’ plan was already passed in November 2022, but was also included as part of the budget. As of July this year, parents with a combined income of $80,000 or less will receive a 90 per cent subsidy on childcare.

For families earning over $80,000 (combined), the subsidy will decrease by one per cent per every additional $5,000, capping off at $530,000. 

According to the ABC, this means a “typical family earning about $120,000 with a child in care for three days per week will save about $1700 a year.”

A further $72.4 million has been allocated to bolster the early childhood education sector, which includes financial assistance to complete a Bachelor or Masters degree in early childcare.

Paid Parental Leave Scheme

As first announced in the October 2022 budget, the labour government is enhancing Australia’s paid parental leave scheme from 20 to 26 weeks by 2026. The new policy won’t restrict which parent can use the leave or the duration they can take within the 26 weeks.

From 1 July 2023, Parental Leave Pay and Dad and Partner Pay will combine into a single 20‑week payment, and a new family income test of $350,000 per annum will see nearly 3,000 additional parents become eligible for this entitlement each year.

Single-parent families

As of September this year, the cut-off age for the single parenting payment will be increased to 14 years old. Previously, single parents were required to apply for JobSeeker payments (currently $745.20 per fortnight) once their child turned eight.

This change means single parents – 90 per cent of whom are women – will now be eligible to maintain their single parenting payments ($922.10 per fortnight) for another six years.

“It’s an investment in these families. I know firsthand what it’s like to grow up with a single mum doing it tough, and we want to make sure that the children of single-parent families [have] the best opportunities in life, to go on and … aspire to a good life with good jobs with security,” said Prime Minister Anthony Albanese at the time of the announcement.

Single parents will also benefit from changes to earning arrangements under the Parenting Payment (single) scheme – those with one child can earn $569.10 per fortnight, plus an additional $24.60 per additional child, before welfare payments will be withheld.

This announcement is expected to support 57,000 single parents in Australia.

Chalmers also announced the abolishment of the ParentsNext program from 1 July 2023 – which has been described as a “punitive” program that suspends welfare payments to parents who do not undertake activities required under the program, such as attending employment appointments.

A new voluntary program will be developed in its place to help prepare parents for employment opportunities.

Women’s safety

The government is setting aside $590 million for the National Plan to End Violence against Women and Children, and $194 million will go towards a range of Indigenous women’s safety programs.

Funds to boost Australia’s skills and capabilities

The government has already started to move forward on addressing Australia’s skills shortage. In December 2022, it announced the $402 million Jobs and Skills Councils to help address skills shortages.

Last night’s budget also reiterated the previously announced $3.7 billion five-year national skills agreement. In conjunction with the states and territories, this agreement aims to enhance the quality of vocational education to “boost productivity and support Australians to obtain the skills they need to participate and prosper in the modern economy”. 

Boosted income support payments

The government has also pledged to support people looking to enter the workforce.

“Even with unemployment at historic lows, we know there are still people struggling to find work and struggling to get by,” said Chalmers. “The pressures on the budget are acute, but as a Labor Government we will always strive to help those who need it the most.”

Its help in this space comes in the form of a $40 per week increase to JobSeeker, Austudy and Youth Allowance payments.

The eligibility requirements for higher rates of JobSeeker payments for older workers (an additional $92.10 per fortnight) is also set to increase to over 55s. Previously, the benchmark was set at 60+.

“Payday super gets many younger women what they are owed, but more needs to be done and bridging the gender super gap starts with paying super on parental leave.” – Bernie Dean, Industry Super Australia, CEO

Investments into climate action

Anthony Albanese announced the creation of a $23 million dollar Net Zero Authority the week ahead of budget night, in a bid to help Australia to reach its goal to reach net zero carbon emissions by 2050.

“We know it’s in the nation’s interest for Australian industries in the regions to be investing in decarbonising and therefore it is in the interests of the government to help,” Energy Minister Chris Bowen said during the announcement last week, according to ABC reports.

The Authority will address three areas:

  • Creating new employment options and training opportunities for those working in high-emission industries (i.e. coal mining)
  • Supporting communities in the uptake of near clean energy industries
  • Helping investors and companies find opportunities to help Australia to reach its net zero goal.

The authority is expected to start operating as of 1 July 2023.

Investing in a quantum strategy

Ahead of the budget night, Minister for Industry and Science Ed Husic announced a first-of-its-kind quantum strategy that’s predicted to inject $6 billion into our economy and produce approximately 20,000 jobs by 2045.

Quantum technology applies the exploration of subatomic particles to tackle problems such as reducing the time and expenses involved in developing new medications, facilitating the shift to net-zero emissions by enhancing battery storage, and securing cyber infrastructure.

This billion-dollar strategy, part of the government’s National Reconstruction Fund, is expected to encompass:

  • Investment into research and development, and commercialisation opportunities
  • The resources and infrastructure required to grow in this sector
  • Developing skilled employees to work in this industry.

“I can’t emphasise this enough, quantum technologies will be truly transformative. We are already seeing how quantum sensing equipment is making a huge difference for industry,” Husic said during his speech announcing the strategy.

“By pairing a National Quantum Strategy with the National Reconstruction Fund, we’re aiming to turn Australia into a global technology leader, building stronger industry and creating jobs for the future.”

Other notable announcements

Voice to Parliament referendum – $360 million will go into funding the Indigenous Voice to Parliament referendum to fund campaigns and mental health support for First Nations people during the referendum.

Cost-of-living relief – The government announced $14.6 billion dollars worth of cost-of-living assistance, including support to purchase critical medicines, boost wages and to pay soaring energy bills.

As first flagged in December’s Power Bill Relief package, the government has pledged a one-off $1.5 billion payment to address rising electricity bill costs. 

This is expected to cap out at $500 and higher rebates will be set for Australia’s most vulnerable, such as the elderly, veterans, small businesses and those on income support. 

Tax breaks for energy efficient technology – Chalmers announced a temporary tax relief for small businesses (those with less than $50 million in annual turnover). These businesses can claim back 20 per cent of what they invest into clean energy technology, such as energy-efficient air conditioning, LED lighting etc.  

Nearly four million small businesses are expected to benefit from this $314-million package, which will run over the next four years.

Expansion of instant asset write-offs – The government will extend the $20,000 instant asset write-off program for assets purchased, installed and ready for use between 1 July 2023 and 30 June 2024. This means small businesses (in this case, those with an annual turnover of less than $10 million) can deduct the full cost of business assets up to $20,000.

This is expected to support nearly four million Australian small businesses.

Budget surplus – The Government has confirmed that this was the first budget surplus in 15 years (only by $4 billion), due to strong employment rates (Australia’s current unemployment rate is 3.5 per cent, compared to its peak of 7.5 per cent in July 2020) and high prices for resource exports.

However, experts predict challenges could lay ahead in 2024, with commodity prices expected to drop, potentially plunging the government back into a deficit. So the real challenge will be seeing if the government can deliver long-term economic results. 

You can view the full budget papers here.

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John Neylon
John Neylon
1 year ago

Great article – very comprehensive. Many thanks.

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What HR needs to know about the 2023 Federal budget


From a “historic” wage increase for aged care workers to changes to how often you’ll need to pay superannuation contributions. Here’s what HR needs to know about the 2023 budget.

You’d be forgiven for feeling a little overwhelmed at the amount of legislative change coming from the Federal Government in recent months. 

Not only have workplaces already seen a flurry of industrial activity come out of the Fair Work Legislation Amendment Act 2022 (Secure Jobs, Better Pay Bill), but last October’s placeholder budget also saw plenty to digest, including changes to Australia’s parental leave scheme.

The May 2023 budget has revealed even more change for Australia’s business community – so let’s dive in.

Read HRM’s timeline of recent and upcoming changes to come out of the Secure Jobs Bill.

Historic wage increases

As part of what’s being called a “historic” boost to an award wage, those working in the aged care industry can expect an interim 15 per cent pay rise in recognition of the critical work they do supporting Australia’s most vulnerable citizens.

“The Prime Minister has said it many times – the heroes of the pandemic deserve more than our thanks; they deserve fair pay for their vital work,” said Chalmers. 

These workers – the majority (86 per cent) of whom are female – can expect an extra $7500-$10,000 per year as a result of this pay rise, and it will be delivered in one go as opposed to incrementally, as was initially planned.

Chalmers hinted at further wage reforms to come, such as federal approach to criminalising wage theft, standing up for casual workers and acting on the details shared in the Same Job, Same Pay proposal to give greater protection to gig workers.

Read HRM’s article on the Same Job, Same Pay proposal here.

Forecasts also predict a possible widespread increase to real wages across the board from early 2024 due to falling inflation rates. However, some experts suggest this could be short-lived.

Superannuation reforms

Chalmers announced two significant changes to the payment of superannuation. The first is one for the payroll professionals to pay close attention to. 

1. Super guarantee payments to be paid out on pay day, rather than in quarterly instalments, as of July 2026. This gives employees greater visibility over their super payments and a better opportunity to identify any instances of unpaid super or incorrect payments.

Industry Super Australia says this change could save Australians more than $50,000 at retirement due to higher compounding interest from more frequent payments, and “curb Australia’s unpaid super scourge which has cost workers $33 billion over seven years”.

“This budget delivers a big win for the three million mostly young and lower paid Australians unfairly deprived of the super they’ve earned and will give them a better shot at building a good nest egg for retirement,” says Industry Super Australia’s CEO, Bernie Dean.“Payday super gets many younger women what they are owed, but more needs to be done and bridging the gender super gap starts with paying super on parental leave.”

2. A new 30 per cent tax rate was announced for superannuation balances over $3 million, as of 2025.

The Australian Tax Office will also receive support to crack down on unpaid superannuation with a $13.2 million investment into a new compliance system.

Support for women and families

Childcare

The government’s ‘cheaper childcare’ plan was already passed in November 2022, but was also included as part of the budget. As of July this year, parents with a combined income of $80,000 or less will receive a 90 per cent subsidy on childcare.

For families earning over $80,000 (combined), the subsidy will decrease by one per cent per every additional $5,000, capping off at $530,000. 

According to the ABC, this means a “typical family earning about $120,000 with a child in care for three days per week will save about $1700 a year.”

A further $72.4 million has been allocated to bolster the early childhood education sector, which includes financial assistance to complete a Bachelor or Masters degree in early childcare.

Paid Parental Leave Scheme

As first announced in the October 2022 budget, the labour government is enhancing Australia’s paid parental leave scheme from 20 to 26 weeks by 2026. The new policy won’t restrict which parent can use the leave or the duration they can take within the 26 weeks.

From 1 July 2023, Parental Leave Pay and Dad and Partner Pay will combine into a single 20‑week payment, and a new family income test of $350,000 per annum will see nearly 3,000 additional parents become eligible for this entitlement each year.

Single-parent families

As of September this year, the cut-off age for the single parenting payment will be increased to 14 years old. Previously, single parents were required to apply for JobSeeker payments (currently $745.20 per fortnight) once their child turned eight.

This change means single parents – 90 per cent of whom are women – will now be eligible to maintain their single parenting payments ($922.10 per fortnight) for another six years.

“It’s an investment in these families. I know firsthand what it’s like to grow up with a single mum doing it tough, and we want to make sure that the children of single-parent families [have] the best opportunities in life, to go on and … aspire to a good life with good jobs with security,” said Prime Minister Anthony Albanese at the time of the announcement.

Single parents will also benefit from changes to earning arrangements under the Parenting Payment (single) scheme – those with one child can earn $569.10 per fortnight, plus an additional $24.60 per additional child, before welfare payments will be withheld.

This announcement is expected to support 57,000 single parents in Australia.

Chalmers also announced the abolishment of the ParentsNext program from 1 July 2023 – which has been described as a “punitive” program that suspends welfare payments to parents who do not undertake activities required under the program, such as attending employment appointments.

A new voluntary program will be developed in its place to help prepare parents for employment opportunities.

Women’s safety

The government is setting aside $590 million for the National Plan to End Violence against Women and Children, and $194 million will go towards a range of Indigenous women’s safety programs.

Funds to boost Australia’s skills and capabilities

The government has already started to move forward on addressing Australia’s skills shortage. In December 2022, it announced the $402 million Jobs and Skills Councils to help address skills shortages.

Last night’s budget also reiterated the previously announced $3.7 billion five-year national skills agreement. In conjunction with the states and territories, this agreement aims to enhance the quality of vocational education to “boost productivity and support Australians to obtain the skills they need to participate and prosper in the modern economy”. 

Boosted income support payments

The government has also pledged to support people looking to enter the workforce.

“Even with unemployment at historic lows, we know there are still people struggling to find work and struggling to get by,” said Chalmers. “The pressures on the budget are acute, but as a Labor Government we will always strive to help those who need it the most.”

Its help in this space comes in the form of a $40 per week increase to JobSeeker, Austudy and Youth Allowance payments.

The eligibility requirements for higher rates of JobSeeker payments for older workers (an additional $92.10 per fortnight) is also set to increase to over 55s. Previously, the benchmark was set at 60+.

“Payday super gets many younger women what they are owed, but more needs to be done and bridging the gender super gap starts with paying super on parental leave.” – Bernie Dean, Industry Super Australia, CEO

Investments into climate action

Anthony Albanese announced the creation of a $23 million dollar Net Zero Authority the week ahead of budget night, in a bid to help Australia to reach its goal to reach net zero carbon emissions by 2050.

“We know it’s in the nation’s interest for Australian industries in the regions to be investing in decarbonising and therefore it is in the interests of the government to help,” Energy Minister Chris Bowen said during the announcement last week, according to ABC reports.

The Authority will address three areas:

  • Creating new employment options and training opportunities for those working in high-emission industries (i.e. coal mining)
  • Supporting communities in the uptake of near clean energy industries
  • Helping investors and companies find opportunities to help Australia to reach its net zero goal.

The authority is expected to start operating as of 1 July 2023.

Investing in a quantum strategy

Ahead of the budget night, Minister for Industry and Science Ed Husic announced a first-of-its-kind quantum strategy that’s predicted to inject $6 billion into our economy and produce approximately 20,000 jobs by 2045.

Quantum technology applies the exploration of subatomic particles to tackle problems such as reducing the time and expenses involved in developing new medications, facilitating the shift to net-zero emissions by enhancing battery storage, and securing cyber infrastructure.

This billion-dollar strategy, part of the government’s National Reconstruction Fund, is expected to encompass:

  • Investment into research and development, and commercialisation opportunities
  • The resources and infrastructure required to grow in this sector
  • Developing skilled employees to work in this industry.

“I can’t emphasise this enough, quantum technologies will be truly transformative. We are already seeing how quantum sensing equipment is making a huge difference for industry,” Husic said during his speech announcing the strategy.

“By pairing a National Quantum Strategy with the National Reconstruction Fund, we’re aiming to turn Australia into a global technology leader, building stronger industry and creating jobs for the future.”

Other notable announcements

Voice to Parliament referendum – $360 million will go into funding the Indigenous Voice to Parliament referendum to fund campaigns and mental health support for First Nations people during the referendum.

Cost-of-living relief – The government announced $14.6 billion dollars worth of cost-of-living assistance, including support to purchase critical medicines, boost wages and to pay soaring energy bills.

As first flagged in December’s Power Bill Relief package, the government has pledged a one-off $1.5 billion payment to address rising electricity bill costs. 

This is expected to cap out at $500 and higher rebates will be set for Australia’s most vulnerable, such as the elderly, veterans, small businesses and those on income support. 

Tax breaks for energy efficient technology – Chalmers announced a temporary tax relief for small businesses (those with less than $50 million in annual turnover). These businesses can claim back 20 per cent of what they invest into clean energy technology, such as energy-efficient air conditioning, LED lighting etc.  

Nearly four million small businesses are expected to benefit from this $314-million package, which will run over the next four years.

Expansion of instant asset write-offs – The government will extend the $20,000 instant asset write-off program for assets purchased, installed and ready for use between 1 July 2023 and 30 June 2024. This means small businesses (in this case, those with an annual turnover of less than $10 million) can deduct the full cost of business assets up to $20,000.

This is expected to support nearly four million Australian small businesses.

Budget surplus – The Government has confirmed that this was the first budget surplus in 15 years (only by $4 billion), due to strong employment rates (Australia’s current unemployment rate is 3.5 per cent, compared to its peak of 7.5 per cent in July 2020) and high prices for resource exports.

However, experts predict challenges could lay ahead in 2024, with commodity prices expected to drop, potentially plunging the government back into a deficit. So the real challenge will be seeing if the government can deliver long-term economic results. 

You can view the full budget papers here.

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1 Comment
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John Neylon
John Neylon
1 year ago

Great article – very comprehensive. Many thanks.

Sorry, no posts matched your criteria.
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