The BGA Australia Team led by Managing Director Fergus Hanson, wrote an update to clients on Australia’s new budget which balances competing economic priorities.


  •  The government’s fiscal position benefited from the increased prices of Australian commodities following the invasion of Ukraine, but the budget reflects that real wages will not rise, and inflation will remain problematic.
  • At the core of the government’s political pitch are increased subsides for child care, investment in skills development and availability of affordable housing. However, with inflation and the outlook of Australia’s top trading partner China uncertain, the Labor government will face difficulties in delivering its campaign promises to lower electricity prices and lift real wages while increasing investments in renewable energy.


  • Australia’s economic outlook is widely viewed as pessimistic and suggests strong economic headwinds in 2024. However, Australia is well placed to outperform many other major economies. The economy is expected to grow 3.3 percent over 2022-23 before slowing to 1.5 percent in 2023-24, and unemployment is expected to rise from around 3.5 percent to 4.5 percent in 2024.
  • Australia’s strategic circumstances are reflected in the budget and present ongoing opportunities for businesses. Defense spending is expected to increase 8 percent in 2022-23 and rise to more than 2 percent of gross domestic product over the next four years. The government has extended an Australian Public Service cyber hubs pilot and will establish an Australian Critical Minerals and Development Hub.


  • Clients can expect Australia’s business community to cautiously welcome the budget and the new business opportunities it creates but call for measures to boost productivity and attract investment ahead of the May 2023-24 budget.
  • Businesses can expect the new budget’s investments in skills and child care to boost workforce participation. However, companies should monitor proposed union-friendly workplace relations laws.

BGA will continue to keep you updated on developments in Australia as they occur. If you have any comments or questions, please contact BGA Australia Managing Director Fergus Hanson at