Federal Budget: A view from rural Victoria

The 2023 Federal Budget didn’t make any large commitment for rural communities in Victoria or across the country. There are some measures that will be of interest and value for rural communities specifically, which are outlined below.

There are opportunities for some infrastructure funding and disaster response and preparedness that councils may wish to explore.

Health

Health was a significant feature of the budget, while the broad changes will benefit rural Victoria, there were a few elements that specifically addressed rural and regional areas.

$3.5 billion over 5 years from 2022–23 to address the decline in general practitioners’ bulk billing of patients on low incomes, and children. This funding will triple the bulk billing incentive benefits for consultations for Commonwealth concession card holders and patients aged under 16 years of age.

Within the broad package of health initiatives, some specifically reference rural and remote locations: 

• $31.6 million over two years from 2023–24 to trial enhanced training arrangements to support international medical students working in rural and remote locations
• $4.5 million over 5 years from 2022–23 ($5.4 million over 6 years) to increase rural generalist trainees by expanding the single employer model trials by a further 10 trial sites from 1 July 2023

$79.5 million over 4 years from 2023–24 (and $19.9 million ongoing) to double the Regional Pharmacy Maintenance Allowance to ensure the ongoing viability of pharmacies due to reduced dispensing income

A few housing initiatives, while not specifically focused on rural, they are important in the context of the policy and advocacy work regarding housing.

Clean Energy

Clean energy was again a feature of the budget. Further detail in the design of the Power the Regions Fund was released. Potential opportunities for rural areas.

Powering the Regions Fund – final design

The Government will allocate $1.3 billion over 5 years from 2022–23 from $1.9 billion provided in the 2022–23 October Budget to support the decarbonisation of existing industries, develop new clean energy industries and support sovereign manufacturing capacity essential to the energy transition including:

• $450.3 million over 4 years from 2023–24 (and a further $149.7 million over 3 years from 2027–28) to establish the Safeguard Transformation Stream to support decarbonisation investments at trade-exposed industrial facilities covered by the Safeguard Mechanism
• $400.0 million over 4 years from 2023–24 to establish the Industrial Transformation Stream to support reduction of direct and indirect emissions at existing industrial facilities, or clean energy development, in regional Australia
• $400.0 million over 3 years from 2023–24 to establish the Critical Inputs to Clean Energy Industries Stream to support the sovereign manufacturing capability of industries that produce inputs (primary steel production, cement and lime, alumina and aluminium) that are essential to the development of Australia’s clean energy industries
• $14.5 million over 4 years from 2023–24 to accelerate the development of the offshore renewable energy industry growth strategy and regulatory compliance activities
• $8.6 million over 4 years from 2023–24 to support implementation and review of the Safeguard Mechanism reforms
• $3.9 million over two years from 2023–24 for a review of policy options to reduce carbon leakage, including of an Australian carbon border adjustment mechanism.

Funding of $89.0 million has also been provided through the Powering the Regions Fund to support energy transition investments important to regional Australia, including the 2023–24 Budget measures titled Capacity Investment Scheme and Ensuring the Supply of Reliable, Secure and Affordable Energy.

The Powering the Regions Fund will continue to support Government purchase of Australian Carbon Credit Units.

This measure builds on the 2022–23 October Budget measures titled Establishing Offshore Renewables in Australia and Powering Australia – establishing the Powering the Regions Fund.

Disaster Response

This was a feature in the October budget and much of this was a recommitment to programs already funded or announced.

Urgent Health Supports for Flood-affected Communities

The Government will provide $9.8 million in 2022–23 to provide urgent mental health and mosquito-borne disease supports to communities impacted by flooding in Victoria, Tasmania and New South Wales, including First Nations communities.

The cost of this measure will be met from within the existing resourcing of the Department of Health and Aged Care.

Disaster Support

The Government will provide funding to improve Australia’s resilience to natural disasters and support recovery of impacted communities including:

• $125.7 million over 5 years from 2022–23 (and $28.3 million per year ongoing) to uplift the capacity of the National Emergency Management Agency to support Australians during, and following, a disaster. Funding from 2024–25 will be held in the Contingency Reserve, pending a review of the agency’s funding requirements
• $10.1 million over two years from 2023–24 to scope the capability needs to modernise Australia’s emergency service communications to provide Commonwealth, and state and territory agencies high-speed and high-capacity mobile broadband services, to improve the operational effectiveness and safety of public safety personnel
• $8.6 million in 2023–24 to supplement and maintain a national emergency management stockpile of disaster response resources
• $8.0 million over 4 years from 2023–24 to continue to provide financial assistance to eligible New Zealanders in Australia following a disaster
• $7.4 million over 4 years from 2023–24 (and $0.6 million per year ongoing) to establish and maintain a Disaster Recovery Management System
• $7.2 million over two years from 2023–24 to extend mental health services supporting communities affected by disasters
• $2.3 million in 2022–23 to extend the Regional Small Business Support Program Pilot until 30 June 2023 to continue existing support to regional small businesses, with costs met from within existing uncommitted resources of the National Emergency Management Agency

The Government will also provide $200 million in 2023–24 for disaster resilience initiatives through the Disaster Ready Fund to address a broad range of natural hazards, infrastructure needs, and for systemic risk reduction projects. Funding for this element has already been provided for by the Government.

The support outlined in this measure is in addition to previous assistance of $1.4 billion committed by the Commonwealth Government in response to multiple disaster events under Category C and D of the Disaster Recovery Funding Arrangements.

The cost of this assistance will be met from funding previously included in the Contingency Reserve. This measure builds on the 2022–23 October Budget measure titled Disaster Support

Infrastructure

The Government will provide $1.8 billion over 10 years from 2023–24 for infrastructure priorities to support productivity and jobs. Funding includes:

• $1.1 billion in 2032–33 to continue existing road maintenance and safety programs, with:
  • $500.0 million for the Roads to Recovery Program
  • $350.0 million for national road network maintenance
  • $110.0 million for the Black Spot Program
  • $85.0 million for the Bridges Renewal Program
  • $65.0 million for the Heavy Vehicle Safety and Productivity Program
  • $18.9 million for transport research organisations and innovation projects 

$22.3 million over 6 years from 2023–24 for phase 3 of the Strategic Local Government Asset Assessment Project to continue assessments of local government road assets, which will support the development of a national automated road access system for heavy vehicles

Early Childhood

Early Childhood Education and Care Workforce

The Government will provide $72.4 million over 5 years from 2022–23 to support the Early Childhood Education and Care (ECEC) sector to build and retain the ECEC workforce. Funding includes:

• $34.4 million over 5 years from 2022–23 to subsidise ECEC services to backfill up to 75,000 early childhood educators, early childhood teachers and centre directors to undertake mandatory or highly recommended training, or to pay an allowance to the educator if training is undertaken outside work hours
• $33.1 million over 5 years from 2022–23 to provide financial assistance for up to 6,000 educators in the ECEC sector to undertake a paid practicum in initial teacher education courses at a bachelor or post-graduate level
• $4.8 million over 5 years from 2022–23 to support up to 2,000 ECEC workers to undertake a practicum exchange at a different service, with a living allowance for students undertaking a practicum in a rural or remote location.
• The initiatives will prioritise support for First Nations educators, and educators in regional and remote areas.

The cost of this measure will be met from savings identified in the 2023–24 Budget measures titled Child Care Subsidy Reform – additional integrity and Education – reprioritisation

Arts and Culture

As part of a larger set of arts and cultural measure there were some specifically targeted at regional and remote communities.

Revive – National Cultural Policy and Location Incentive

 $11.8 million over 4 years from 2023–24 to pilot long-term loans of National Gallery of Australia works to regional and suburban cultural institutions across Australia

$8.5 million over 4 years from 2023–24 (and $2.2 million per year ongoing) to increase funding for the Regional Arts Fund to support cultural development in regional and remote communities

Housing

RCV priority on housing there were several housing measures in the budget. While not specifically targeted into rural communities. They provide further clarity on the government approach to housing affordability and the types of programs and initiatives they may support.

Housing (Build-To-Rent Developments) – accelerating tax deductions and reducing managed investment trust withholding tax rate.

For eligible new build-to-rent projects where construction commences after 7:30 PM (AEST) on 9 May 2023 (Budget night), the Government will:

• increase the rate for the capital works tax deduction (depreciation) to 4 per cent per year
• reduce the final withholding tax rate on eligible fund payments from managed investment trust (MIT) investments from 30 per cent to 15 per cent.

This measure will encourage investment and construction in the build-to-rent sector, expanding Australia’s housing supply.

This measure will apply to build-to-rent projects consisting of 50 or more apartments or dwellings made available for rent to the general public. The dwellings must be retained under single ownership for at least 10 years before being able to be sold and landlords must offer a lease term of at least 3 years for each dwelling.

The reduced managed investment trust withholding tax rate for residential build-to-rent will apply from 1 July 2024. Consultation will be undertaken on implementation details, including any minimum proportion of dwellings being offered as affordable tenancies and the length of time dwellings must be retained under single ownership.

This measure is estimated to decrease receipts by $30.0 million and increase payments by $4.3 million over the 5 years from 2022–23.

Increasing the Supply of Social and Affordable Housing and Making it Easier to Buy a Home

The Government will introduce a number of housing measures to increase support for social and affordable housing across the country and improve access for home buyers, including:

• increasing the Government-guaranteed liability cap of the National Housing and Finance Investment Corporation (NHFIC) by $2.0 billion to $7.5 billion to enable NHFIC to increase its support for social and affordable housing through loans from the Affordable Housing Bond Aggregator
• amending NHFIC’s Investment Mandate to require NHFIC to take reasonable steps to allocate a minimum of 1,200 homes to be delivered in each state and territory within 5 years of the Housing Australia Future Fund commencing operation
• expand the eligibility of the Home Guarantee Scheme to: –
  • allow any 2 eligible people to be joint applicants for a guarantee beyond spouses and de facto partners
  • allow non-first home buyers who have not owned a property in Australia for at least 10 years to access the First Home Guarantee and Regional Home Guarantee
  • allow a single legal guardian of children to access the Family Home Guarantee
  • allow Australian permanent residents to access the Scheme
• redirecting interest earnings on unallocated NHFIC funds to support more social and affordable housing and delivery of housing priorities.

The Government will also provide $2.7 million in 2023–24 to the Treasury to support delivery of priority housing measures. The Government is also enabling up to 3 additional members to be appointed to the National Housing Supply and Affordability Council to provide a greater breadth of policy expertise.

This measure expands on the 2022–23 October Budget measure titled Safer and More Affordable Housing