With polls due next month, Treasurer Josh Frydenberg has splashed out with tax cuts, significant investment in skills, and funding for roads, railways and airports.
The move aims to boost the chances of the ruling centre-right Coalition under prime minister Scott Morrison winning a third term in office.
Delivering his first budget this week, Frydenberg pledged A$158bn (US$112bn) of tax relief for more than 10 million Australians.
Lump sums to low- and middle-income earners will rise from July, the government will amend tax brackets, and the 32.5% tax rate will be lowered to 30% from 2024–25.
However, a top personal rate of 45% on earnings after A$200,000 will also take effect in 2024, meaning Australians will still pay one of the highest rates of taxation in the Organization for Economic Cooperation and Development.
A key feature of the budget is what Frydenberg dubbed an ambitious “new A$525m skills package”, although most of this is existing funding that has been reallocated.
In an effort to boost business investment and skilled employment, the Treasurer promised a A$400m expansion of the small business instant asset write-off and A$2,000 incentive payments to new apprentices.
He has pledged to create 80,000 apprenticeships in sectors suffering skills shortages by increasing incentive payments to employers to A$8,000 per placement.
The measures have been welcomed by Australian industry organizations which say the instant asset write-off will encourage businesses to spend and invest.
Transport congestion is a problem in major cities such as Sydney and Melbourne, and in an effort to ease this Frydenberg set out details of A$100bn in infrastructure spending over 10 years.
An A$2bn fast rail link will be constructed between Melbourne and Geelong, regional airports will receive A$100m, and freight rail links to Tasmania are to be improved.
Responding to the budget, the opposition Labor Party promised to almost double the number of new apprenticeships promised by Frydenberg and to spend A$200m on technical and further education (Tafe) institutions.
