The 2024 federal budget comes at a delicate point in time, with the government trying to balance cost of living relief with managing inflationary pressures.
So what are the key items that may impact you?
Cost of living relief
The much talked about stage three tax cuts will be rolled out from the 1st of July, with the government estimating that the average benefit will be around $1,888 per year. The table below outlines the changes in further detail:
All households will receive a $300 energy bill rebate, this is an extension of the relief that applied to low-income households last year.
The cost of medications on the pharmaceutical benefits scheme will be frozen until 2026 for the general population and 2030 for pensioners and concession card holders. Deeming rates will also be frozen in a move that will save single age pensioners $3,300.
Superannuation
Superannuation payments will now be mandated on the 20 weeks of government funded parental leave. This will help to boost the member balances of approximately 180,000 families each year and reduce the gap between men’s and women’s retirements savings.
From 1 July 2026, employers must pay superannuation at the same time as they pay salary and wages. This will result in money being invested and compounding in the tax-effective superannuation environment for longer.
Business owners
The instant asset write off scheme will be extended for another 12 months. This scheme allows small businesses with annual turnover of less than $10m to claim a tax-deduction of up to $20,000 on new equipment. However, legislation has stalled in parliament amid debate for the threshold to be increased to $30,000.
Public servants
More than 2,500 new positions will be created for public servants as the government looks to replace roles that were previously outsourced to consultants.
Students
Those with HECS or HELP debt will benefit from a change to how interest is accrued on these types of loans. Moving forward, interest will be accrued on the lower of the consumer price index (CPI) or the wage price index. This change will also be backdated, meaning that loans from June 2023 will have the wage price index of 3.2% applied to them, as opposed to last years CPI figure of 7.2%.
Who are some of the other beneficiaries of the budget?
Businesses involved in the transition to green
Arguably the biggest winners of the budget are businesses involved in the transition towards a greener future. A number of loans, investments and incentives were announced including:
- $19.7 billion towards the Future Made in Australia policy, which is aimed at turning Australia into a renewable energy superpower.
- Tax incentives of $7 billion for critical minerals, $8 billion for green hydrogen, and $1.5 billion for the Australian Renewable Energy Agency.
- $835 million towards the Solar Sunshot program and $523 towards the Battery Breakthrough Initiative.
- $1.2 billion for critical minerals projects.
Housing sector
$4.3 billion of new housing expenditure will be directed towards tradies, developers, and social housing providers. The government will also fast track visas for 1900 migrants to work in housing construction.
Family violence protection measures
There will be a $1 billion commitment from the federal government to make the Leaving Violence Program permanent. This program will see women who are fleeing violent relationships receive a payment of $5,000. Another $1 billion will be directed towards accommodation and housing for women and children escaping situations of domestic violence.
Those who’ve missed out…
Consultants
Government spending on consultancies, labour hire and contractors will reduce by $1 billion over the next four years.
Migrants
Permanent migration is going to be capped at 185,000 places next year, with 132,200 of these positions set aside for people who fit Australia’s long term skill requirements.
The number of places for international students at Australian universities will also be capped, with the finer details still being determined in discussions with the universities.
Sheep farmers
The government will proceed with its pre-election promise to stop the live export of sheep from Australia. A total of $107 million has been set aside in to help the industry cease trading by May 1, 2028.
Other key spending areas not mentioned above include defence and foreign affairs, aged care workers, rental assistance, healthcare, social services, social media security, teaching and nursing students.
If you have any comments or questions about how the federal budget may impact you, our advisers are always happy to help. Please email us at communications@capital-partners.com.au, or give us a call at 6163 6100.
