What you need to know about the 2024 –25 federal budget  

May 15th 2024 | Categories: Federal Budget |

“It’s a responsible budget that helps people under pressure today and invests in the promise and potential of the more prosperous future that we can make together. Our main priorities are helping with the cost of living, building more homes for Australians, investing in a Future Made in Australia, and the skills and universities we’ll need to make it a reality.”
– Treasurer Jim Chalmers, MP 

The ongoing cost of living crisis continues to dominate conversations in Australian households. Against persistent inflation and a sluggish economy, the topic took center stage in Treasurer Jim Chalmers’ 2024-25 federal budget address on Tuesday night at Parliament House.  

Titled: “Cost-of-living assistance and a future forged in Australia.” The new financial year budget is the federal government’s substantial $7.8 billion allocation of relief efforts.  

So, what exactly does the budget entail to alleviate the financial strain felt by Australians? Here’s a breakdown of the key cost-of-living relief measures:   

Taxpayers receive tax cuts    

The much-anticipated restructured stage 3 tax cuts take the spotlight as the cornerstone of the relief measures. More than 13.6 million Australians earning above the $18,200 tax-free threshold annually will benefit from these cuts. Those within the $45,000 to $135,000 income bracket can expect income tax relief ranging from $804 to $3,729 starting July 1.   

Electricity bill rebates   

Starting July 1, every household in Australia will receive a $300 rebate on their power bills, while 1 million small businesses will benefit from a $325 rebate. Over the coming year, this translates to a $75 reduction per bill for quarterly electricity bill payers, totaling a $3.5 billion budget cost. These rebates aim to directly alleviate inflation pressures.   

Increase in rent assistance   

Nearly 1 million low-income households receiving Commonwealth Rent Assistance will see a further increase in support. An additional $1.9 billion over five years will raise the maximum rate by 10%, following last year’s 15% increase. This move, effective from September 20, aims to provide vital assistance to renters facing financial hardship.   

Affordable health care  

To ease the burden on healthcare costs, Medicare card holders will benefit from a one-year freeze on maximum Pharmaceutical Benefits Scheme (PBS) co-payments, extended to five years for pensioners and other eligible concession card holders. This ensures that listed medicines under the scheme remain affordable, with costs capped at the maximum cost of $31.60 or for concession card holders, $7.70, until 2030.   

Enhanced support for pensioners   

Social security deeming rates, crucial for income assessments for Centrelink payments including the age pension, will remain at current levels for an additional 12 months until June next year. This freeze will aid approximately 876,000 income support recipients, including 450,000 age pensioners, in managing rising cost of living expenses.   

HECS-HELP relief  

In a revamp of current HECS-HELP indexation, the government held true to its promise to backdate a projected $3 billion from student debts by indexing to the lower of the consumer price index or the wage price index. This will provide relief to millions of current and former higher education students who have been grappling with rising debts over the past years of high indexation.   

Focus on women   

Significant measures targeting women’s financial well-being are included in this year’s budget. The provision for superannuation on government paid parental leave, amounting to $1.1 billion over the next four years, aims to bolster women’s retirement savings and minimize the gender pay gap.   

In response to a nationwide outcry over the alleged murders of dozens of women this year has prompted a $925.2 million Leaving Violence Program. The funding will be poured into the program over five years starting from July 1, 2025, to help survivors, and their children, flee domestic violence. Up to $5000 of financial support, which will be indexed each year to match inflation, is available to all, including migrants regardless of their visa status.   

“Violence against women is a national shame and it requires national action,” Chalmers said.    

The program will put $6.5 million aside for an online age verification trial to stop young people viewing inappropriate and violent content and address gender-based violence in higher education. A further $1 billion, under the $11.3 billion housing package, will fund urgent crisis and transitional housing for those fleeing domestic violence.   

Looking ahead  

The stimulus provided by this Budget will bring some relief in the short term, but our economy will be relying on the big ideas, such as the Future Made in Australia project, to provide the resilience we need in an uncertain global economy.  

Treasury is forecasting slow global growth and only 1.75% growth in Australia this financial year and 2% next year along with a significant deficit.  

If you have any questions about how the federal budget measures announced may impact on you and your financial situation, please don’t hesitate to contact us.  

To read the full 2024 –25 federal year budget, head to Budget.gov.au | Budget 2024–25 

Information in this article has been sourced from the Budget Speech 2024-25 and Federal Budget Support documents.  

It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change.  

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