What the Latest 2024-25 Federal Budget Means For You
The Federal Australian Budget announcement titled ‘Cost of living help & a future made in Australia’ had a focus on ‘Easing pressures today and investing in a better future’.
The Australian Federal Budget 2024-25 focuses on providing relief from the current cost-of-living pressures while investing in the country's future. The government acknowledges that global economic challenges, high but moderating inflation, and higher interest rates have contributed to these pressures. Despite this, Australia's economy is well-positioned to handle these difficulties due to responsible economic management, which has helped ease inflation and budget pressures.
Key Highlights from the Budget:
Easing Cost-of-Living Pressures:
The government aims to help Australians manage living expenses by reducing inflation and maintaining low unemployment rates.
Real wage growth has returned, and Australia has recorded the second strongest budget balance among G20 countries.
Building More Homes for Australians:
Investments will be made to increase housing availability, helping more Australians own homes.
Investing in a Future Made in Australia:
The budget plans to capitalise on global economic changes, including the net zero transformation, to maximise opportunities for Australians.
Strengthening Medicare and the Care Economy:
Additional funding and support will be provided to improve healthcare services and support the care economy.
Broadening Opportunity and Advancing Equality:
Initiatives will focus on creating equal opportunities for all Australians, ensuring a fair and resilient economy.
Financial Outlook:
The budget forecasts a second surplus in 2023-24, marking the first back-to-back surplus in nearly two decades.
Lower inflation and reduced debt are expected over the forward estimates, with inflation projected to fall back into the Reserve Bank of Australia's target band sooner.
In the official outline, which you can find here, the budget aims to balance immediate cost-of-living relief with long-term economic growth, ensuring sustainable public finances and a resilient economy.
Let’s take a look at these initiatives and the key outcomes:
1. Easing cost‑of‑living pressures:
All 13.6 million Australian taxpayers will get a tax cut, with an average tax cut of $1,888 or $36 a week
$3.5 billion in energy bill relief for all Australian households and 1 million small businesses
$1.9 billion to increase Commonwealth Rent Assistance by a further 10 per cent, benefiting nearly 1 million households
Cheaper medicines as part of the up to $3 billion agreement with community pharmacies
Waiving $3 billion in student debt for more than 3 million Australians to make student loans fairer
Getting consumers a better deal at the supermarket checkout and through the energy transition
$1.1 billion to pay superannuation on Government-funded Paid Parental Leave
$138 million to boost funding for emergency and food relief and financial support services
Supporting wages growth through submissions to the Fair Work Commission and supporting pay rises for care sector workers
Extending the freeze on deeming rates for 876,000 income support recipients
2. Building more homes for Australians
Help to build, rent and buy
New housing investment of $6.2 billion in this Budget
An extra $1 billion to states and territories to deliver new housing
$1.9 billion for a 10 per cent increase in Commonwealth Rent Assistance
Additional $1.9 billion in concessional finance for social and affordable homes
An extra $423 million for the National Agreement on Social Housing and Homelessness
$88.8 million to deliver 20,000 new fee-free TAFE places, including pre-apprenticeship programs, in courses relevant to the construction sector
More student accommodation
Infrastructure and transport for more accessible cities and suburbs
An additional $16.5 billion for new and existing infrastructure projects across Australia over 10 years
More money for every state: an additional $9.5 billion for projects over the forward estimates
Future-proofing Western Sydney with $2 billion to improve transport networks and plan and build roads supporting housing developments
$2.2 billion to enhance connectivity and increase accessibility and reliability of South East Queensland transport networks
3. Investing in a Future Made in Australia
Attracting investment in key industries and making Australia a renewable energy superpower
A new 'front door' for priority projects, and streamlined and strengthened approvals
$6.7 billion production tax incentive for the production of renewable hydrogen
$1.7 billion to promote net zero innovation, including for green metals and low-carbon fuels
$1.5 billion to strengthen battery and solar panel supply chains through production incentives
Value adding to our resources and strengthening economic security
$7 billion production tax incentive for the processing and refining of critical minerals
$566.1 million to map Australia's geological potential to support net zero transition
$14 million to build better markets through trade, promoting competitive and fair global markets
$268 million to support the development of defence industries and skills
Investing in skills for priority industries and higher education
$1.1 billion to reform higher education and deliver our skilled workforce
$88.8 million for 20,000 new training places relevant to construction
$55.6 million to support women's careers in clean energy
Strengthening our digital, science and innovation capabilities
$466.4 million to advance Australia's quantum computing capabilities
$288.1 million to expand Digital ID into a whole-of-economy service
$448.7 million for advanced satellite data on climate, agriculture, and natural disasters
Supporting small business and our regions
$290 million to extend the $20,000 instant asset write-off for small businesses
$10.8 million to support the mental and financial wellbeing of small business owners
$519.1 million from the Future Drought Fund for farmers and rural communities
4. Strengthening Medicare and the care economy
$2.8 billion to strengthen Medicare and boost our world-class health system
$3.4 billion for new and amended listings on the Pharmaceutical Benefits Scheme
$825.7 million to continue to test for and vaccinate against COVID-19
$888.1 million to help people get the mental health care they need
$2.2 billion to improve aged care
$468.7 million to support people with disability and get the NDIS back on track
$227.6 million for a new specialised disability employment program to support approximately 270,000 Australians with disability to prepare for and find work
$1.8 billion to support additional frontline staff at Services Australia
$630.3 million to sustain, secure and enhance myGov
$314.1 million to enhance safety and security at Services Australia
Funding set aside towards increased aged care and early childhood education and care wages
5. Broadening opportunity and advancing equality
Delivering $925.2 million for financial assistance and support services for victim-survivors leaving a violent partner
$1.1 billion to pay superannuation on Government-funded Paid Parental Leave, benefiting 180,000 families each year
Addressing gender-based violence in higher education
$56.1 million to support women's sexual and reproductive health initiatives
$777.4 million to develop local jobs, services and economic opportunities in remote regions
$111.1 million to improve remote First Nations communities' access to essential services in the Northern Territory
$41.2 million in targeted support for JobSeeker Payment recipients with additional barriers to work
$68 million to roll out community wi-fi in remote communities and better support digital literacy
$53.8 million to establish First Nations language centres and expand learning services
$29.1 million to partner with First Nations community-controlled peak bodies to improve early childhood and education outcomes
Establishing the $100 million Outcomes Fund and supporting place-based strategies in skills and employment
But, what will personally effect you?
Here is a breakdown of key budget initiatives that could effect you.
Young Families
The budget aims to address and relieve the cost of living pressures for families, delivering tangible support for families to address the costs of all of the little things that add up along the way including uniforms, sports, camps and more.
Additional Child Care Subsidy: Families will benefit from an additional $2,430 in Child Care Subsidy.
Paid Parental Leave: Expansion to 26 weeks by 2026, including superannuation payments on Government-funded leave.
Energy Bill Relief: $300 in energy rebates to help with rising costs.
Middle-income Households
.Tax Cuts: Average tax cut of $1,888 per year. Tax relief between $804 and $4,529 for households earning $45,000 to $135,000.
Medicare Levy Exemption: Increased low-income thresholds ensuring more low-income taxpayers are exempt or pay a reduced rate.
Energy Bill Relief: $300 in energy rebates.
Welfare Recipients
Increased Rent Assistance: Maximum rates increased by 10%, benefiting nearly one million households.
Boost in Income Support: Higher rates of JobSeeker Payment and Energy Supplement with additional financial support.
Extension of Freeze on Deeming Rates: Benefits 876,000 income support recipients.
Students/Young people
Student Debt Relief: $3 billion cut in student debt, capping the HELP indexation rate.
Commonwealth Prac Payments: Financial support of $319.50 per week for students undertaking mandatory placements.
Fee-Free TAFE Places: $88.8 million for 20,000 new training places relevant to construction
High-Income Earners
Tax Threshold Adjustments: Increased income thresholds for higher tax rates, with the 45% rate now applying to incomes above $190,000.
Tax Cuts: Reduction of the 32.5% tax rate to 30%.
Capital Gains Tax Relief: Potential benefits from broader economic policies aimed at high-income earners .
Retirees
Increased Medicare Levy Low-Income Thresholds: Ensuring more retirees are exempt from the levy.
Extension of Freeze on Deeming Rates: Continued support for income support recipients.
Additional Home Care Packages: $531.4 million to reduce wait times and support aging at home.
Small Business
Instant Asset Write-Off Extension: $290 million to extend the $20,000 instant asset write-off for 12 months.
Energy Bill Relief: $3.5 billion in energy bill relief, including $325 rebates for around one million small businesses.
Cash Flow Support: $25.3 million to improve payment times and $23.3 million to increase eInvoicing adoption.
Fair Work Ombudsman Funding: $20.5 million to help small businesses understand and comply with recent workplace relations changes, enhancing legal compliance and employee relations.
Dispute Resolution Support: $2.6 million to support more small businesses through alternative dispute resolution mechanisms.
Fee-Free TAFE Places: $88.8 million to deliver 20,000 new fee-free TAFE places, including pre-apprenticeships in courses relevant to the construction sector, supporting workforce development.
Tailored Supports: $10.8 million invested to deliver tailored, free, and confidential financial and mental wellbeing supports for small business owners, aimed at enhancing resilience and stability in the sector.
Superannuation
Paid Parental Leave Superannuation: $1.1 billion allocated to pay superannuation on Government-funded Paid Parental Leave.
Increased Superannuation Contributions: Measures to ensure super contributions during career breaks for childcare.
Reforms to Support Sustainable Superannuation: Various reforms to enhance the overall super system and retirement outcomes.
Payday Super - no further details proposed measure but funding to improve unpaid super in bankruptcy and liquidations from 1 July 2024
Super account balances above $3m - no further details but implementation funding to implement for public sector schemes.
The 2024-25 Federal Budget aims to strike a balance between immediate cost-of-living relief and long-term economic growth.
By addressing key areas such as energy costs, tax relief, housing affordability, and wage growth, the Budget aims to reduce inflationary pressures and support sustainable economic development. These measures are expected to bring inflation back into the Reserve Bank of Australia's target band by the end of 2024, fostering a stable and resilient economy for all Australians.
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