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Why should I care about the federal budget?
The contents provided on this page are for informational purposes only and do not constitute financial advice. Consider your personal circumstances and objectives before making any financial decisions.
Once a year there’s a lot of talk about budget night and the Australian federal budget, but how does it really impact our daily lives?
Let’s cut through the noise and look at why the federal budget actually does matter, what we should be looking out for, and how we can adjust our money habits to stay in control of our finances.
What is the federal budget?
When the COVID-19 pandemic hit, everyone’s lives took a detour. For most of us that meant changes to how we worked, and for a lot of us it meant changes to the way we stayed connected with friends and family. What it also meant was changes to the way we used our money, including the Australian Government.
To help provide support to people during the pandemic, the government spent more than they planned to on things like health and welfare. Between March 2019 and April 2022, the government’s gross debt increased from $543.4 billion to $885.5 billion.
The federal budget is a plan for how the government will collect and spend money over the next financial year. This usually includes information about how and where resources will be collected and allocated among various sectors, as well as any significant changes, and can be impacted by increases in government debt.
The funds used in the federal budget are mainly through our taxes, so if you’re working and receiving regular income it’s worthwhile understanding how the federal budget works! Getting across the federal budget can also help you prepare for any changes that may impact anything from the cost of groceries to employment stability.
How will the federal budget impact me?
The funds that are collected and allocated through the federal budget are mainly made up of the taxes you pay if you are employed and receive a regular income.
Understanding the federal budget and how it works can help you see how tax dollars are being spent, as well as prepare for any changes that may impact your daily life.
The changes announced in the budget can affect your personal finances in a number of different ways. Some of these might be:
Cost of Living
Any adjustment in taxes, such as GST or duties on everyday items, will immediately affect your living expenses. This means expenses such as your groceries, utilities and entertainment and leisure.
See how we’ve tracked changes in consumer spending through the Beforepay Cost of Living Index.
Employment and Wages
Changes in government spending can create or cut jobs, which might influence your job, job opportunities and your income.
Being aware of these changes early enough could give you enough time to plan your own budget and set up an emergency fund if you need.
Long-term Savings
Updates in the federal budget to superannuation or public investment schemes can impact your future financial security.
Staying informed about the changes could help you be proactive about any adjustments you may want to make to help your cashflow or future savings. You might even consider looking for other ways to make extra money to help you in the long-term.
What changes should I look out for in the federal budget?
The government may announce changes to one or more categories in the federal budget. Some changes that might be worth taking a note of are:
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Tax Adjustments
These could alter how much money you take home each payday. -
Benefits
Changes in social welfare, child support, or pension plans could impact your monthly budgeting. -
Major Reforms
Reforms in healthcare, education or infrastructure might influence your access to these essential services.
How can I prepare for any changes that might come out of the federal budget?
While the budget can bring uncertainty, being proactive and using this time of year as an opportunity to review your finances and see where or how you might be able to make any improvements could help you down the track.
Here are 3 things you can try now that could help you later!
1. Review your budget
Reassess your cashflow, review your regular expenses and see if there are any changes you can make to budget better. Beforepay’s free in-app budgeting tool could help you get started.
2. Prepare your emergency fund
Whether it’s by setting up your Beforepay account so you have quick access to cash on a rainy day, or putting some money aside now, this could come in handy in case of any unexpected expenses, especially with avoiding the pitfall of high-interest loans.
3. Monitor your expenses
Check in on your spending patterns and consider how and where they might change in case of any adjustments in the federal budget. You can use spending insights in the Beforepay app to review your expenses.
Understanding and adjusting to the federal budget doesn't have to be complicated. Taking the time to get ahead now can take you further later and help you make informed decisions about your money.
Disclaimer: Beforepay Group Ltd ABN: 63 633 925 505 (Beforepay) allows eligible customers to access their pay and/or access their tax refund, and also provides budgeting tools. The views provided in this article include factual information and the personal opinions of relevant Beforepay staff. This article contains selected summary information only and is provided for general information purposes only. Beforepay and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this blog post and do not accept any liability for any loss whatsoever arising from the use of this information. Please read our Terms of Service carefully before deciding whether to use any of our services.
