The areas of increases in spending are shown in Figure 6. This is drawn from Budget Paper No 1, Statement 6. The most interesting dollar increase is in transport and communication. This is an increase in spending of $3.848 billion. This represents an increase of 33.5%. This spending is primarily driven by "acting on climate change". The government provides $1.9 billion to the "Powering the Regions Fund". This provides dedicated support to energy transition of regional industries to net zero while harnessing the economic opportunities presented by decarbonisation.
In addition, the "Driving the Nation Fund" invests $500 million including the delivery of electric vehicle charging infrastructure, hydrogen highways for freight routes, and further investment in charging infrastructure. To make electric vehicles cheaper, there is $345 million devoted to an Electric Car Discount that will cut taxes by exempting eligible electric cars from fringe benefits tax and the 5% import tariff.
Even though unemployment rises over the next few years, it rises to levels which are far, far below the average levels of unemployment Australia has seen in the previous two decades.
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The beneficial situation that Australia finds itself in, can also be seen in the budget outlays. These are shown in Figure 5. These are drawn from Budget Paper No 1, Statement 6.
Total outlays in the budget are $650.922 billion. Social security and welfare is the largest item with $228.8 billion or 35.1% of total spending.
Health spending is next at $109.694 billion or 16.9% of spending. Education spending comes next with $46.3 billion or 7.1% of total spending. Only then comes Defence with $38.303 billion or 5.9% of total spending.
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What this Budget does
Australia is not a country in crisis. Australia is a rich and confident economy and its only suffering is the problem of distributing the benefits of an extremely healthy terms of trade. The government has responded to this happy position by providing cheaper childcare and more parent leave. They have tried to expand health care and make medicines cheaper. They have provided further support to aged care.
They are expanding places in TAFE and in universities. In addition to doing that, it is spending money on renewable energy.
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