Federal Budget May 2023 overview: Superannuation and retiree announcements

The second Budget of the Albanese Government holds the line on fiscal discipline, while acknowledging the pain that many Australian households now face with mounting cost-of-living pressures. The Budget seeks to address the latter issue directly with a relief package of almost $15 billion, spearheaded by its Energy Price Relief Plan.

Budget outlook and key forecasts

Since the October 2022 mini-budget, the Commonwealth Government has enjoyed a receipts tailwind provided by a strong labour market and elevated commodity prices. These have combined to now deliver a surprise expected cash surplus of $4.2 billion for the 2022–23 financial year, followed by a deficit of $13.9 billion for 2023–24.

The outlook for inflation is unfortunately less rosy, with the Consumer Price Index (CPI) forecast to stay at a stubbornly high 6% for 2022–23, falling to 3.25% for 2023–24. Inflation is now not forecast to fall back into the RBA’s preferred 2–3% per year band before 2024–25.

With real wages forecast to fall 2.25% this financial year, this budget’s focus is very much on alleviating cost-of-living pressures, with many of the key budget measures aimed at providing assistance to counteract the effects of rising household living costs.