Focus remained firmly on the federal budget today, as all sectors of society and business took a moment to digest the implications.
The ASX remained flat as predicted this morning, finishing down about 0.25% as Financials dipped, losing 0.71%, and Energy, Materials and Communication Services followed suit, although with smaller losses.
Unsurprisingly, the Health Care (+1.01%) and Real Estate (+0.27%) sectors were up today, buoyed by the budget’s 3-fold increase to the Medicare bulkbilling incentive scheme, a cut to taxes on build-to-rent development and an expansion of the first home guarantee.
Commodities were flat or green across the board except for nickel, which has lost 4.17% today, a relatively large dip for the battery metal, which is now down 15.47% over the last year.
Platinum, on the other hand, gained by 2.96%, maintain the upward momentum that has netted the critical mineral a 12.69% increase of the last year.
Now we know where the market sits, let’s take a look at budget reactions from across the country.
Federal budget applies pressure on states to contribute
“Step up.”
That was the message Dave Copeman, director of the Queensland Conservation Council, had for the Queensland Government today.
Last night’s federal budget included $1 billion for low-cost loans to improve household energy efficiency, including solar panels, and a further $300 million to go towards low interest loans to upgrade energy performance in social housing.
To cap it off, the government is offering a variable rebate of up to $500 for energy bills from July 2023, a welcome respite for Australians about to enter a particularly cold winter.
“The energy rebate and low-cost loans for energy efficiency in this Federal Budget are welcome steps towards easing the pressure on households struggling with rising costs of fossil-fuel generated power,” Copeman said.
“While this immediate relief is crucial, if we want to permanently lower power prices and keep our communities safe, we must fast-track investment in renewable energy.
“Renewable energy can tackle both the cost of living and climate crises.
“The Queensland Conservation Council urges the Queensland Government to step up its part in delivering energy bill relief for people in social housing, match the Federal Government’s $300 million for energy improvements and focus on solar.
“We need Queensland Government-backed interest-free loans and grants for small-scale solar and storage and increased support for the rollout of solar rooftops on private rental properties.
“We’re also calling for more publicly-owned renewable energy projects to bring down power bills and improve reliability.
“This is an exciting time of transition towards renewable energy, with households and communities looking for government leadership and support to help them go solar and move away from fossil fuels.
“It’s a critical moment when the investment decisions made today by the government can deliver more affordable power and reduce emissions for years to come.”
Solar Citizen’s national director Heidi Lee Douglas echoed the sentiment.
“We call on state governments to match this funding dollar-for-dollar so everyone in social housing can save with both solar and other energy upgrades,” Douglas said.
“National polling released this week clearly shows the vast majority (79%) of Australians want Federal Government assistance for ongoing energy bill relief through access to cheaper, smarter and cleaner household solar.
“The Australian community also supports funding for installing solar on public and community housing as a priority (79%).
“No Australian household should be left behind in the move to cheap clean solar energy. Solar Citizens calls for tailored government support to ensure the 30% of households who are renters do not miss out on the ongoing, year in year out energy bill relief that solar can provide.
“All Australian households should be running on cheap, clean solar power instead of burning expensive, polluting fossil fuels.”
AMA welcomes “enormous injection” of funding
The government unveiled two core health initiatives for this budget period – a massive increase to the bulk billing incentive, and an option to buy certain medications at a two-for-one price from pharmacies to reduce medication costs.
The Australian Medical Association (AMA) weighed in on the budget measures, lauding the government’s fulsome response to the organisation’s entreaties for better funding in a range of sectors.
“We absolutely welcome the enormous injection that we've seen tonight in funding to immediately make healthcare and general practice visits affordable and accessible to the most vulnerable Australians,” AMA president professor Steve Robson said.
“We've also seen funding for things the AMA have been taking to the Government.
“We've asked for funding for longer Telehealth consultations.
“We've asked for funding for longer in-person consultations.
“We've asked for better funding models for wound care.
“All of these things have been listened to and we're delighted the Government has responded with funding.
“We knew tonight had to be a healthcare budget, and we're delighted that the Government has listened to what we have been saying to them for a long time now.
“There are also other important incentives and initiatives tonight, like making medicines more affordable for Australians, vaping, all sorts of initiatives. So, it has been a health budget tonight.
“The Government has listened to the AMA's requests and we're very, very happy tonight.”
Pharmacy Guild opposes prescription initiative
The Pharmacy Guild of Australia was less enthused than the AMA, citing medicine shortages as the core reason the guild opposes the government’s two-for-one cost-saving measure.
National President of the Pharmacy Guild of Australia Professor Trent Twomey said millions of patients would be worse off because the proposal guaranteed medicine shortages across the country.
“If the Federal Government proceeds with this proposal, everyday prescription medicine will be put into severe shortages lasting months, not days or weeks,” Twomey said.
“I am very concerned for Australian patients and big shortages will hit common medicines that treat cholesterol, blood pressure, diabetes, depression, anxiety, epilepsy and Parkinson’s disease to name just a few.
“We are calling on the Federal Government to reconsider.
“I don’t want to see a Hunger Games stand-off in any community in Australia where some patients get double the medicine they need, while others get nothing.
“We want to work with the Government to deliver cheaper medicine for millions of patients through our proposal to drop the PBS co-payment to $19, helping all Australians in this cost-of-living crisis.”
The Royal Australian College of General Practitioners have hit back at the Guild’s claims, with president Dr Nicole Higgins calling the Pharmacy Guild’s approach ‘fear mongering’ in an interview with newsGP.
‘This fear mongering is akin to daylight savings and saying that our curtains will fade because there’ll be more sunlight – it’s a complete furphy,’ she said.
Federal Health and Aged Care Minister Mark Butler appears to agree, contradicting the Guild’s claims and stating only seven of the eligible medicines on the scheme are currently in short supply, with alternative brands available.
“This is not going to change the number of tablets dispensed in a given period of time,” he said.
“It is simply going to mean that people can get two boxes at a time, instead of having to get one box and come back twice as often.”
Patients will also be required to consult with their GP to check whether they are eligible for the dispensation arrangement, and obtain a new script if so.
While Butler ruled out a medicine shortage, he did acknowledge that pharmacies would be taking a financial hit from the scheme.
“Which is why I have assured them and assured the community that every single dollar the Government saves from this measure … will be reinvested into pharmacy programs,” he said.
“For five years now the independent authority, the experts who run our medicines system, have said that … people should only go to a pharmacy once every two months and get two months’ supply of medicines.
“We decided to accept the advice and we’re convinced it is the right thing to do … It is good for health, it’s good for hip pockets, it’s the right thing to do for Australian patients.”
Mixed response from Tech and start ups
Marketed as a “responsible budget for uncertain times”, this years’ budget didn’t have a lot of fat left over for the tech and finance sector once all was said and done.
Small business seemed to be the main focus, with the $392 million Industry Growth Program as the centrepiece.
The budget also included a raft of smaller measures aimed at small and medium enterprises (SMEs) including everything from lowering the instant asset write-off threshold to creating a $23.4 million cyber wardens’ program to protect against the growing spectre of cyber-attacks.
The StartUpDaily.net interviewed several executives about the budget measures, receiving a mixed bag of responses.
“We’ve been forewarned that this would be an austere Budget and so it proves for the Australian tech sector,” William Buck director Jack Qi said.
“The $101 million over 5 years earmarked for quantum computing and AI is a step in the right direction albeit a small one, at less than 1% of what Microsoft (NASDAQ:MSFT) invested into OpenAI.
“At a general SME business level, the instant asset write-off and 20% bonus tax deduction encouraging the green energy transition are nice but won’t move the dial for Aussie tech.
“We’d like to point out to the Government that some of the measures that founders really need actually place minimal stress on the fiscal balance – for example modifying R&D tax incentive to cater for agile software development and simplification of the employee share scheme tax rules for companies falling outside of the Startup Concession.”
Not all executives felt quite so negatively about the budget however.
“While this budget clearly focuses on cost-of-living relief, fintech, and the innovation it can deliver to Australians, has not been forgotten,” said FinTech Australia general manager Rehan D’Almeida.
“We are pleased to see almost $90 million of new funding to support the operation of the Consumer Data Right, uplift cyber security and progress the rollout of action initiation.
“This is yet another cost-of-living measure in disguise, as when fully operational the CDR will spur on competition in energy, telco and banking services.
“Access to talent remains a significant challenge for Australian fintechs; in last year’s FinTech Census 85% of companies reported it as one of the greatest issues affecting the sector.
“Measures to improve visa processing times, improve pathways to permanent residency and invest in strengthening STEM skills are positive steps towards addressing this issue.
“Finally, the government’s new Sustainable Finance Agenda aligns with a growing trend of fintechs incorporating sustainability and positive impact into their business models.
“Ensuring integrity in sustainability claims and developing a new sustainable finance taxonomy will make it easier for fintechs to adopt these approaches.”
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