Cost of living relief

We are providing responsible cost of living relief that doesn’t put additional pressure on inflation.

Cheaper child care

Making child care more affordable for 1.26 million families

The Government is investing $4.7 billion over 4 years from 2022–23 to make early childhood education and care more affordable for Australian families. The Government's reforms will mean 96 per cent of families with children in care are better off and no family is worse off.

From July 2023, Child Care Subsidy rates will increase up to 90 per cent for eligible families earning less than $530,000. Families will continue to receive existing higher subsidy rates of up to 95 per cent for any additional children in care aged 5 and under.

The significant cost of early childhood education and care can prevent parents, particularly women, from working as much as they want. It is estimated these reforms will increase the hours worked by women with young children by up to 1.4 million hours per week in 2023–24. This is equivalent to an extra 37,000 full‑time workers.

The reforms will also support children's learning and development and their readiness for school.

Gita and Matt have a combined annual income of $120,000. Their 2‑year‑old child attends centre-based day care 3 days a week, costing $4,700 a year in out‑of‑pocket early childhood education and care fees. From July 2023, Gita and Matt will receive a Child Care Subsidy of 82 per cent, an increase from the current 71 per cent. This will save them $1,780 in out‑of‑pocket fees in 2023–24.

For more information refer to Cheaper Child Care fact sheet [PDF 764KB]

Expanding Paid Parental Leave

Supporting families, participation and gender equality

The Government is investing $531.6 million over 4 years from 2022–23 to expand the Paid Parental Leave scheme and provide greater support to families. In 2026, families will be able to access up to 26 weeks of Paid Parental Leave.

This expansion is the biggest reform to the scheme since its introduction in 2011. It will enhance economic security, improve gender equality and increase participation and productivity. It will support parents to spend more time with their children and share caring responsibilities more equally.

The modernised scheme will include reserved ‘use it or lose it’ weeks for each parent, to encourage both parents to take parental leave. Either parent will be able to claim Paid Parental Leave first and both parents can receive the payment at the same time as any employer‑funded parental leave. The reforms also improve flexibility, with parents able to take leave in blocks as small as a day at a time, with periods of work in between.

The Women’s Economic Equality Taskforce will examine the optimal model for 26 weeks of Paid Parental Leave including the number of weeks that parents can access at the same time and the mix of 'use it or lose it' weeks. This will ensure it delivers the best outcomes for families and encourage more shared parenting.

Next year, Grace and Chris make plans to have a child and want to share work and care responsibilities equally. Under the expanded scheme, they will be able to access Paid Parental Leave for a total of 22 weeks from July 2024 and can use it flexibly. When the baby arrives, Grace will take leave to recover from the birth and breastfeed. Once she is ready to return to work, Grace will take leave 2 days a week and Chris will take leave 3 days a week, with each accessing a total 11 weeks of leave.

More affordable housing

Working together to fix the housing crisis

Australia is facing acute housing pressures and too many Australians do not have access to affordable housing. At the same time Australia has a low level of institutional housing investment and the world’s third largest pool of capital in our superannuation system which is hungry for investments that will deliver stable returns over the long term.

A target of one million new homes under a national Housing Accord

The Government is bringing states and territories, the Australian Local Government Association, investors, and representatives from the construction sector together under a new national Housing Accord. The Accord sets an aspirational target of one million new, well-located homes to be delivered over 5 years from mid‑2024 as capacity constraints are expected to ease.

Under the Accord, the Government will provide $350 million over 5 years, with ongoing availability payments over the longer term, to deliver an additional 10,000 affordable dwellings. States and territories will also support up to an additional 10,000 affordable homes, increasing the dwellings that can be delivered under the Accord to 20,000.

Planning for the future of Australia's housing

Beyond the Accord, the Government will develop a National Housing and Homelessness Plan to set out other actions and longer-term reforms. The Plan will be developed in close consultation with the states and territories and other stakeholders.

Investing in social and affordable housing

The Accord builds on the Government's $10 billion investment to establish the Housing Australia Future Fund. Returns from the Fund will be used to build 30,000 new social and affordable dwellings over 5 years.

The Government is expanding the remit of the National Housing Infrastructure Facility to allow it to more flexibly use $575 million of existing funds. This will help unlock a projected 5,500 new dwellings.

Helping more Australians to realise their dream of home ownership

Regional First Home Buyer Guarantee

The Government is helping 10,000 eligible first home buyers a year in regional Australia to buy a home by guaranteeing up to 15 per cent of the purchase price.

Supporting veterans to purchase a home

The Government is committing $46.2 million to expand the Defence Home Ownership Assistance Scheme. This will support veterans and Australian Defence Force members to purchase a home through monthly subsidies on mortgage interest payments.

Help to Buy

Under Help to Buy, eligible home buyers will have access to an equity contribution to buy a home with a smaller deposit and a smaller mortgage.

Helping older Australians who want to downsize

The Government is extending the exemption of home sale proceeds from pension asset testing by 12 months and is expanding access to make downsizer contributions to superannuation for people aged 55 to 59.

Cutting the cost of medicines

Maximum cost of PBS general scripts to fall for the first time in 75 years

The PBS general co‑payment will be lowered to $30

The maximum cost to general patients for PBS medications has doubled since 2000. These high costs meant that close to one million people delayed or did not fill their medications in 2019–20. Some Australians are having to choose between filling prescriptions for potentially life‑saving medicines and providing other essentials for their families.

In this Budget, the Government is cutting the cost of medicines to ease cost‑of‑living pressures. From 1 January 2023, the Government will decrease the maximum co‑payment under the PBS from $42.50 to $30 per script, a 29 per cent reduction. Each year, this will save around 3.6 million Australians more than $190 million in out‑of‑pocket costs.

More cost‑effective medicines

The Government is providing an additional $1.4 billion for new and amended listings on the PBS and other medicines programs. This will allow greater access to affordable and life‑saving essential medicines and includes treatments for various types of cancer and growth hormone deficiency in children.

Anne is a general (non-concessional) patient living with diabetes who is taking the PBS medicine sitagliptin with metformin. She needs 2 tablets a day, which means filling 13 scripts per year. In 2022, Anne paid $552.50 for a year’s worth of her medicine. With the reduction to the PBS general patient co‑payment on 1 January 2023, Anne will pay $390 in 2023 for 13 scripts, saving her $162.50. Every year approximately 300,000 scripts for the combination diabetes treatment, sitagliptin with metformin, are accessed through the PBS.

Getting wages moving again

Improving pay and reducing income inequality

Standing up for low-paid workers

Low-paid workers experience the worst impacts of inflation and have the least capacity to draw on savings. That's why one of the Government's first acts was to support wage increases for Australia’s lowest paid workers to ensure that their real wages do not go backwards. The Fair Work Commission delivered a minimum pay rise of $40 per week for full‑time workers, benefitting around 2.7 million workers.

The Government has also supported a pay rise for aged care workers and will provide funding to support any resulting increases to award wages decided by the Commission.

Improving pay and sharing prosperity

The Government is supporting increased pay for women in low‑paid sectors, including through the introduction of a statutory equal remuneration principle which will reduce barriers to pay equity claims.

The Government will also revitalise the workplace relations system to boost wages by simplifying and expanding access to the enterprise bargaining process. These changes will help employers and employees come together to reach agreements on better pay and conditions, especially in low‑paid occupations.

Secure and well-paid jobs

Boosting job security and protecting employee entitlements

Making jobs more secure

The Government is tackling insecure work to allow more workers to plan for their future and get ahead by making job security an explicit objective of the Fair Work Act 2009 and limiting the use of fixed‑term contracts for ongoing roles.

Reinvigorating bargaining and boosting wages

Workplace bargaining will be reinvigorated through targeted and balanced changes to the workplace relations system. This will support more businesses to reach agreements with their employees that improve pay outcomes, especially in low‑paid occupations.

Improving workplace conditions and protections

The Government will strengthen employment conditions and protections through a fairer workplace relations system, by providing a more robust framework for flexible work and enhancing the anti‑discrimination framework. This will reduce harm to workers and the economy. The small claims process will also be enhanced to support employees to recover unpaid wages more easily.

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