Unpacking the Federal Budget 2023 for ECEC services

The following summarises the announcements made in the lead-up to the Federal Budget 2023 on 9 May 2023:

  • $72.4m over 5 years for training for 80,000 ECEC educators and staff (with a focus on regional, rural and indigenous communities)
    • This funding will allow providers to backfill 75,000 early childhood positions, as workers and management undertake professional development.
    • Up to 6,000 educators will be able to upskill by being financially supported to complete on-the-job teaching placements.
  • Some providers will be eligible to apply for a share in $18 million in grants of up to $900,000 to set up a new family day care service in an area with limited supply.
  • The government will also invest $10.9 million to help the social and economic participation of vulnerable people across the country.
  • 1.2m families to benefit from subsidy rate lift from 10 July 2023
    • via expansion of the CCS rates from 20%-85% to 1%-90% of the Hourly Rate Cap
    • via increase in the household income threshold from $356,756 to $540,000
  • $2.8m over 4 years to streamline the delivery of the Additional Child Care Subsidy

The following summarises the announcements made on 9 May 2023 in relation to the Federal Budget 2023 that would be of interest also to virtually all early childhood education and care service providers:

  • Forecast of the economic slowdown still stands, although anticipating a soft landing for Australia.
  • National inflation rate is forecast to ease to 6% in June 2023 to 3.25% in June 2024.
  • NSW population growth at 1.4% is slightly lower than the national population growth at 1.44%, and is lower than the population growths in QLD (3.3%), WA (2.9%), SA (1.9%) and the ACT (1.6%).
  • Low interest loans and tax incentives to improve energy efficiency. Small businesses with a turnover of up to $50m will be eligible for a $20,000 tax break if they invest in energy efficiency upgrades.
  • New National Skills Agreement plan for 300,000 free TAFE spots.
  • 20% bonus tax depreciation for energy efficiency expenditure (up to $100k for business with < $50m turnover).
  • (Continuing the) temporary increasing of the instant asset write-off threshold (to $20k asset threshold first used and installed during FY2023/2024 for businesses with < $10m turnover).
  • For educators/teachers: The $1,500 tax break Low-and-Middle-Income-Tax-Offset (LMITO) was not revived after being axed in the October 2022 budget.
  • From 2026, employers must pay super at the same time as wages.
  • From 2026, 30% tax rate (increased from 15%) applied to future earnings for superannuation balances above $3m.

Members can contact ACA NSW for any further information/clarification. We will assist as best as we are capable of. That said, ACA NSW strongly recommends that you contact your financial advisors for the technical information/clarification in relation to the Federal Budget 2023.