Will the change of Federal Government impact your household finances?
Democracy sausages have been eaten and the votes have been counted (well counting is still underway in some seats) but Australia has its 31st Prime Minister. As Anthony Albanese takes office, here’s a recap of some of the financial initiatives that were promised during the election campaign. Will these measures really help Australians cope with cost of living pressures?
Over the past 12 months, childcare costs have soared by 6.5%.
One of Labor’s key election commitments was to increase the maximum childcare subsidy (CCS) rate from 85% to 90% for families earning less than $80,000 p.a.
Additionally, families earning up to $530,000 may also be eligible for some level of CCS, whereas previously families earning over $353,680 annually were not entitled to any CCS rebate.
The cost of prescription medicines on the Pharmaceutical Benefits Scheme (PBS) will be reduced by $12.50, meaning the maximum cost of any prescription for PBS medication will reduce from $42.50 to $30.
50 bulk billed treatment centres have been promised across Australia, aimed at increasing access to treatment for minor injuries and relieving pressure on emergency rooms. This $135 million initiative will be based on international systems like New Zealand.
Housing and home ownership
First home buyers who have lived in a regional area for over 12 months will have greater access to the First Home Loan Deposit Scheme, with an additional 10,000 places available on the scheme reserved for regional Australians. With property prices soaring in regional areas over the past few years, it remains to be seen if this initiative will have the desired effect for regional Australians.
The headline grabbing ‘Shared Equity’ scheme was one of the cornerstone items for the Albanese campaign. The Commonwealth Government will own 30-40% of a property, with the homeowner being able to ‘buy back’ equity from the government over time. It’s designed to reduce the mortgage repayments and enable a pathway to full ownership. Interestingly, this scheme will be open to both first home buyers and those who don’t currently own a home. There are strict criteria and pricing caps on properties that can be purchased under this scheme.
Finally in the housing realm, a $10 billion Housing Australia Future Fund has been promised. This scheme is set to fund 20,000 social housing properties in five years and 10,000 affordable homes for frontline workers such as nurses, police and cleaners. Some of the returns from this fund would be allocated to repairs and maintenance to existing accommodation, additional crisis accommodation and services for homeless veterans.
Some electric vehicles look to be getting a little cheaper under the Albanese Government. Electric vehicle models below the luxury car tax threshold of $79,659 will be exempt from some tariffs and taxes, which will reduce the purchase price. To reduce the running costs of electric vehicles, 400 community batteries have also been promised.
As these campaign promises now need to be implemented, we’ll all need to wait and see if these financial schemes, incentives and cash injections will help Australians with the rising cost of living. With more interest rate hikes predicted, it will be an interesting first 6 months for the new Federal Government.