2023 Federal Budget to support millions of workers

The Federal Budget will support millions of workers in meeting the rising cost of living and ensuring that their jobs remain secure as the energy transition continues, according to the AWU.

Each year, the Government sets out its Budget to show where it will spend money on new initiatives, and where the taxes to pay for them come from.

Treasurer Jim Chalmers’ budget, released last night, contains many new measures with particular relevance for AWU members in gas, manufacturing and other industries. We’ve broken down the key announcements to tell you what they mean for you.

Energy Price Relief Plan

What is it?		As part of a $15 billion plan to help households with the cost of living, State and Federal Governments are spending $3 billion to provide one-off power and gas bill relief of up to $500 for low-income households and small businesses. $1 billion will also be provided as the Clean Energy Finance Corporation assist houses with setup.

What does it mean for you?		This measure will help to ease cost of living pressures on households without increasing inflation, as it will directly reduce energy bills. Each state will determine who qualifies for support and how it will be provided, but if you are eligible, any support will be applied directly to your bill.

Petroleum Resource Rent Tax

What is it?		The Petroleum Resource Rent Tax (PRRT), brought in by the Hawke Labor Government in 1987, applies a tax of 40 per cent to profits from offshore gas production. However, most gas producers have not had to pay any tax, as they have been able to deduct their costs of building the project from their tax liability. From this financial year, offshore gas producers will face new rules on how much of their project expenditure they can deduct each year. This will bring their tax payments forward earlier, bringing an extra $2.4 billion to the budget bottom line.

What does it mean for you?		Despite making record super-profits from our resources off the back of the war in Ukraine, multi-national gas companies have fought hard to avoid paying tax in Australia. In 2019-20, Chevron had revenue of $12.1 billion; Exxon had revenue of $15.1 billion; and Shell had revenue of $5.3 billion. All paid no corporate tax. Chevron, in particular, has a history of tax avoidance, losing to the ATO in a fight over a $340 million tax bill – all the while fighting the right of AWU members to collectively bargain. Changes to the PRRT were first considered by the last Government, and the proposed changes will bring gas companies to the table to pay their fair share towards the Government’s measures taken to reduce energy prices.

Powering the Regions Fund

What is it?		The Powering the Regions Fund will offer grants and funding to existing and new energy industries to help them reduce their carbon emissions. The fund will help to pay for technology changes in hard-to-abate industries such as steel, aluminium, concrete and glass manufacturing, and develop new clean energy industries. It will also support workforce development and allow the Australian Government to buy carbon credits to offset emissions. Of the $1.9 billion fund, $400 million is specifically targeted at facilities affected by the safeguard mechanism, $400m is specifically targeted at essential manufacturing industries (steel, cement, alumina and aluminium) and a further $400 million for industrial transformation more broadly.

What does it mean for you?		Recent government reforms will require many AWU employers to reduce their carbon emissions. The Powering the Regions Fund will help to cover the costs of new technology and ways of working, as well as supporting workers in developing new skills in these industries.

Defence projects

What is it?		Under the AUKUS agreement, the US and the UK will assist Australia in acquiring nuclear-powered submarines which will operate in the Indo-Pacific region. The project will cost $268bn to $368bn over the next 30 years. Australia will purchase five US-made Virginia class submarines before building eight submarines in Adelaide based on a British design. The submarines will be completed by 2042. To help offset the cost, $7.8 billion of defence projects have been scrapped.

What does it mean for you?		The federal government’s decision to acquire nuclear-powered submarines as part of the AUKUS alliance will boost our security, our economy, and Australian jobs. The federal government has sensibly made it a key priority to advance the project with a ‘made in Australia, by Australians’ ethos. And defence experts are all but unanimous that the capability will make Australia stronger and safer. However, the AWU will be holding the Government to account in making sure that its promises on local job creation are kept.

National Net Zero Authority

What is it?

The Australian Government is establishing a new Authority to ensure the workers, industries and communities that have powered Australia for generations can seize the opportunities of Australia’s net zero transformation.

The new Net Zero Authority will:

Support workers in emissions-intensive sectors to access new employment, skills and support as the net zero transformation continues.
Coordinate programs and policies across government to support regions and communities to attract and take advantage of new clean energy industries and set those industries up for success.
Help investors and companies to engage with net zero transformation opportunities.

It will work across governments and communities to respond to closures of emissions-intensive facilities, such as coal-fired power stations, while also ensuring that existing industries will have opportunities to grow and adapt to the growing role of renewable energy in Australia.

What does it mean for you?

Australia has seen what happens when we don’t plan for industry transition. We know that coal fired power stations are on a path to closure, and that our manufacturing industry needs reliable and affordable energy supply to thrive. The new Net Zero Authority will have an important role in supporting workers and communities where the energy transition affects operations, by ensuring facility owners provide advance notice of closures and work with their employees to ensure they can have good quality jobs.

Hydrogen

What is it?		$2 billion will be spent on a Hydrogen Headstart program, which will provide revenue support for investment in renewable hydrogen production. The Government will also establish a Guarantee of Origin Certificate scheme to track and verify low-emissions hydrogen.

What does it mean for you?		This investment will be critical for Australia to compete with the US, Europe and other countries as hydrogen becomes more important. Hydrogen has the potential to replace gas and other feedstocks with a zero emissions fuel, and blue hydrogen offers an opportunity to turn our gas resource into a low-emissions fuel.

Capacity Investment Scheme

What is it?		The Government will underwrite the expansion of clean energy across Australia with $10 billion towards a Capacity Investment Scheme. The aim is to invest in both renewable energy generation and storage, to firm the grid.

What does it mean for you?		A capacity investment scheme helps to ensure that there is energy available when the sun isn’t shining and the wind isn’t blowing. The Capacity Investment Scheme offers the opportunity for Australia to invest in battery, hydrogen, hydro power, and gas as ways to firm the electricity grid.

Critical Minerals

What is it?		$80 million will be spent on promotion the Australian critical minerals industry to the world, to build diverse and resilient supply chains and to facilitate projects here in Australia.

What does it mean for you?		Critical minerals are essential for batteries, high-tech products and many other manufactured goods. But Australia has been exporting the vast majority of these precious resources. The AWU would welcome the expansion of these measures to domestic processing.

Resources and manufacturing transition initiatives

What is it?		The Government will develop a Future Gas Strategy, outlining the critical role that gas will play both in our own energy industry and as an export. Alongside this, the government will invest in a domestic offshore petroleum decommissioning industry and review the environmental management framework for offshore petroleum projects. The Government will also establish a Powering Australia Industry Growth Centre to help Australian businesses manufacturing renewable technologies.

What does it mean for you?		The AWU understands that gas and resources essential for our members and for almost any Australian manufacturers. We will work closely with the Government to support our members who work in the gas industry or rely on it for the energy that powers their jobs. We also welcome the opportunity to grow Australia’s renewables industry.

Migration and worker exploitation

What is it?		The Government will increase skilled workers as a share of permanent migration, provide greater work rights for temporary graduate visa holders and lift the Temporary Skilled Migration Income Threshold (TSMIT) to $70,000, to make sure that we are building a skilled workforce for the future rather than relying on short-term temporary migration. $50 million will be spent to protect workers by providing for additional enforcement and compliance activity against dodgy employers.

What does it mean for you?		The AWU supports a migration system with more permanent workers, and less temporary migrants. We have the opportunity to fill gaps for the long-term, rather than create a cycle of dependency on temporary migration that lowers wages. Temporary migrants also deserve better enforcement of the rules already in place from government.

Silica Dust

What is it?

The Government will spend $10 million to develop a national strategy for preventing silicosis and silica-related diseases, including:

A dedicated occupational lung disease team to implement a national framework
Extending the Asbestos Safety and Eradication’s Agency’s remit to include prevention of silicosis
Drawing on Safe Work Australia to increase awareness and support better work practices relating to silica

What does it mean for you?

The AWU has led calls for the Government to tackle silicosis and silica dust related diseases. This is the first step towards implementing a national approach to regulation where employers are required to take proper action to address the serious risks of harm around silica dust.

Health, NDIS and aged care

What is it?

The Budget includes:

$2.2 billion to fix primary healthcare services and improve hospitals
A pay rise for aged care workers at a cost of $14.1 billion
$720 million to fund staff increases and reforms at the NDIS, while reducing the long-term growth of funding for the scheme.

What does it mean for you?

The last Coalition Government substantially underinvested in health and care work. They also failed to put the NDIS on a sustainable path where as many people as possible can be provided services within its budget. All of these measures will help to improve Australia’s health and support system.

Super on payday

What is it?		From July 1, 2026, businesses will be required to pay superannuation contributions for workers at the same time as their general pay. Currently, most employers only make quarterly contributions. Superannuation balances over $3 million will face taxes on earnings at 30 per cent starting in 2025 (an increase of 15 per cent).

What does it mean for you?		More regular payments to superannuation will allow workers to benefit from having more of their money working for them, earlier. It will also allow workers to identify underpayments earlier. Out of the 12.6 million Australians with a superannuation account, less than 1 per cent have a balance over $3 million. If you started working at 25, you would need to earn $200,000 a year to hit the $3 million threshold by your retirement. And these accounts will still benefit from their high balances – only money earned by investment from the account will face the higher tax rate.

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Andrew Knox – Never Forgotten

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