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Federal Budget Big Picture 2024/25

The annual federal budget is Australia’s roadmap that shapes our economic trajectory, social and fiscal policies for the coming year. On Tuesday 14 May, treasurer Jim Chalmers released the 2024 Australian budget – attempting to deliver cost of living relief while managing inflationary risk. The government is attempting to introduce a lot of new spending measures in this budget, with substantial deficits projected from 2026 onwards, after delivering surpluses for 2024 and 2025.

Let’s delve into the key aspects of the 2024 budget and understand its implications and what it means for the Australian economy.

Australian Economic Outlook

Over the last few years, Australia’s economy has been relatively resilient in the face of global challenges. Our current issue is tackling the rate of inflation and the cost-of-living crisis, which has made trading conditions tough for many businesses, and led to many Australians left feeling uneasy and stressed about their personal finances.

Easing Cost of Living Pressures

  • From 1 July 2024, tax cuts will provide an average of $36 extra per week for taxpayers, with adjusted tax brackets aimed at benefitting low - and middle - income earners.
  • $3.5 billion to reduce energy bills, in which each household will receive a $300 electricity rebate to commence on 1 July 2024. In addition to households, more than one million small businesses will also receive energy bill relief.
  • Indexation on student loans with be limited to lower the Consumer Price Index (CPI) or Wages Price Index (WPI), backdated to 30 June 2023 . This will benefit all Australians with a HELP debt, and prevent growth in debt from outpacing wages in the future.
  • $1.9 billion to increase Commonwealth rent assistance by a further 10% to further alleviate rental stress for low income households.
  • $1.1 million in enhancing supermarket price transparency with quarterly reporting by CHOICE.

Building more Homes in Australia

  • Investing over $11.3 billion towards the housing crisis – with $9.3 billion of this to go to establishing the new 5 year National Agreement on Social Housing & Homelessness
  • Deliver more accommodation for students and reduce pressure on the private rental market. The government will work with the higher education sector to develop regulations that will require universities to increase their supply of affordable student accommodation.
  • $16.6 billion additional funding for infrastructure projects to connect our cities and towns

Investing in a Future Made in Australia

  • The government’s $22.7 billion Future Made in Australia package is designed to help facilitate the private sector investment required for Australia to be an indispensable part of the global economy. It attempts to capitalise on the opportunities for Australia in industry, clean energy and resources.

Strengthening Medicare and the Care Economy

  • $2.8 billion has been allocated to strengthen Medicare, including the establishment of additional urgent care clinics and longer specialist consultations to be covered under Medicare.
  • The government is working to finalise the “New Eighth Community Pharmacy Agreement”, which will deliver cheaper medicine, improve patient health outcomes and a secure and strong community pharmacy sector.
  • $2.2 billion to improve our aged care system
  • Large investment in mental health initiatives

Broadening Opportunity and Advancing Equality

  • $925 million package includes a new $5,000 emergency support payment for individuals fleeing violent relationships and situations
  • Superannuation contributions will now be included in government funded paid parental leave to commence in July 2025.

Conclusion

The 2024 budget underscores the government’s commitment to providing immediate cost of living relief and laying the groundwork for long-term economic resilience. How effective this budget will be in dealing with these issues remains to be seen.

For details about the tax implications from the Federal Budget, Brodie Miles has covered that in his article here.

If you would like assistance on the Federal Budget items that relate to you, our team at BLG Business Advisers can always help, so please talk with us for further advice tailored to your needs.

We wish you and your business every success!


*This information is relevant at the time of publishing and is subject to change*
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