Budget Breakdown

May 10th, 2021
The 2021 Federal Budget has been released, and as the second budget to be handed down since COVID-19, it's far from typical. Many of the central elements of the budget are a direct response to the pandemic, as the government tackles a new world and tries to identify Australia's place in it. Health and aged care are front-and-centre, with significant sums of money also going to mental health, women's safety, and education among other sectors. Despite gross debt expected to reach above $1 trillion for the first time by 2025, spending is rife and low-and middle-income-earner tax cuts will continue.

As Australia continues to adapt to a post-COVID world, the nation's health response is critical. The budget will provide continued funding for the COVID-19 public health response, including an additional $1.9 billion for the vaccine rollout. In addition to current agreements, the government has committed to purchasing additional vaccine doses, expanding the nation's capacity to 170 million doses.

An additional $1.5 billion will go to telehealth services, COVID-19 testing, and outbreak prevention programs in remote communities. The mental health sector has also seen increased spending, including $2.3 billion to expand treatment and prevention services. The current global climate has led to an increase in depression and anxiety rates across the community, with the government looking to open new mental health centres, expand suicide prevention services, and improve support for vulnerable groups.

The aged care sector has also been disproportionately affected by the COVID-19 pandemic. The budget response reflects this fact, with the entire sector set to receive $17.7 billion over the next five years. $6.5 billion will support older Australians staying at home for longer, and $7.8 billion will go towards improving the quality and safety of residential aged care services. In addition, $630.2 million will go towards improving aged car service access for Aboriginal and Torres Strait Islanders, along with special needs groups in remote communities.

As a major cultural and political talking point over recent months, the safety and health of women hasn't been ignored. Significant funding has been targeted at the prevention and reduction of violence against women, including a women's safety package of $1.1 billion and a further $376.2 million for legal support. In a situation many women have described as better late than never, the government will also provide $20.5 million toward implementing the recommendations of the Human Rights Commission's Respect@Work report.

In other budget news, $2 billion will be allocated to early education programs, including universal free access to preschool education across the country. Australian schools will also receive $23.4 billion, with funding having grown by around $10 billion since 2014. All-in-all, the budget will be very costly, with Australia's gross debt expected to hit $829 billion by June and $1.2 trillion by 2025. Despite this eye-watering sum, the government will deliver an extra $7.8 billion in tax cuts. The $1080 tax offset will remain for most earners, and dual-income couples will receive up to $2160.