The Treasurer is promising that inflation will decline by 0.75% as a direct result of the 2024-25 Federal Budget initiatives
including energy relief for all households, a boost to Commonwealth Rent Assistance, and the freezing of the maximum co-payment on the
Pharmaceutical Benefits Scheme.
This is a pre-election budget for the people with everyone getting a little something to ease cost of living pressures. Like the Price
is Right
gameshow, it will all come down to the price paid at the checkout. If the consumer price index (CPI) returns to target by the end of 2024
off the back of the Budget initiatives as the Government anticipates, the Reserve Bank of Australia (RBA) may be inclined to reduce
interest rates. However, at this stage, the RBA is not expecting inflation to return to the target range of 2-3% until the second half of
2025, and to the midpoint in 2026.
The 2023-24 surplus has increased to $9.3bn but is expected to decline to a deficit of $28.3bn in 2024-25, driven primarily by the Stage 3
tax cuts.
For business, the Government is picking winners through targeted public investment with its Future Made in Australia Framework that they are betting will pave the way for private investment in net zero transformation and the strengthening of Australia’s domestic economic resilience. For small and medium business, there is a little but not a lot - an extension of the $20k instant asset write-off until 30 June 2025 and a $325 rebate to eligible businesses towards 2024-25 energy bills. For foreign residents, the capital gains tax (CGT) regime will be amended to broaden the type of assets subject to CGT and introduce a modified 365-day principal asset testing period. Key measures:
Those with large superannuation balances will be disappointed that the 30% tax on super earnings on balances above $3 million remains in
place, this is set to commence from 1 July 2025.
| From |
1 July 2024 |
As previously announced, the Government has legislated permanent tax cuts for all Australian taxpayers from 1 July 2024.
Relative to the previous Stage 3 plan, the redesigned cuts broaden the benefits of the tax cut by focussing on individuals with taxable
income below $150,000.
For rates, see Personal income tax rates from 1 July 2024.
|
Resources Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 |
| From |
1 July 2023 |
The Medicare levy low-income thresholds will be increased for singles, families, and seniors and pensioners from 1 July 2023.
| Medicare low-income threshold |
Threshold as at 30 June 2023 |
Threshold from 1 July 2023 |
| Singles |
$24,276 |
$26,000 |
| Families |
$40,939 |
$43,846 |
| Single - seniors and pensioners |
$38,365 |
$41,089 |
| Family - seniors and pensioners |
$53,406 |
$57,198 |
| Family - for each dependent child or student[1] |
$3,760 |
$4,027 |
The increases to the thresholds take account of recent movements in the CPI so that low-income taxpayers generally continue to be exempt
from paying the Medicare levy.
[1] For each dependent child or student, the family income threshold increases by the stated
amount.
| From |
1 July 2024 |
Households will receive a credit of $300 on their energy bills credited as automatic quarterly instalments across 2024-25.
Energy relief will also be provided to eligible small businesses in the form of a $325 rebate.
Costing $3.5bn over three years from 2023-24, the measure extends and expands the Energy Bill Relief Fund.
|
Resources Media release: New power bill relief |
| From |
Loan accounts that existed on 1 June 2023 |
As previously announced, the Government will cap the HELP indexation rate to be the lower of either the CPI or the Wage Price Index (WPI)
with effect from 1 June 2023. The change will apply to all HELP, VET Student Loans, Australian Apprenticeship Support Loans and other
student support loan accounts that existed on 1 June 2023.
By changing the calculation of HELP indexation from 1 June 2023, the indexation rate is reduced from:
The change resolves an issue for more than 3 million Australians with a HELP debt when the CPI indexation rate spiked to 7.1% last year.
An individual with an average HELP debt of $26,500 will see around $1,200 wiped from their outstanding HELP loans this year, pending the
passage of legislation.
Estimated indexation for HELP debts
| HELP debt at 30 June 2023 |
Total estimated credit for 2023 and 2024* |
| $15,000 |
$670 |
| $25,000 |
$1,120 |
| $30,000 |
$1,345 |
| $35,000 |
$1,570 |
| $40,000 |
$1,795 |
| $45,000 |
$2,020 |
| $50,000 |
$2,245 |
| $60,000 |
$2,690 |
| $100,000 |
$4,485 |
| $130,000 |
$5,835 |
*Actual credit amount will vary depending on individual circumstances including repayments made during the year. All HELP debts that were indexed in 2023 and are subject to indexation on 1 June 2024 will receive an indexation credit.
|
Resources Media Release: Cutting student debt for more than three million Australians |
| From |
1 July 2025 |
As previously announced, from 1 July 2025 superannuation will be paid on Paid Parental Leave payments from 1 July 2025.
Eligible parents will receive an additional payment based on the superannuation guarantee (i.e. 12% of their PPL payments), as a
contribution to their superannuation fund.
This payment is in addition to the changes that saw families provided with an extra two weeks of leave (22 weeks total), which will increase
to 24 weeks from July 2025 and 26 weeks from July 2026 (see Paid
Parental Leave Amendment (More Support for Working Families) Bill 2023, Royal Assent 20 March 2024).
|
Resources Media Release: Paying super on Government Paid Parental Leave to enhance economic security and gender equality |
| From |
20 September 2024 |
The Commonwealth rent assistance maximum rates will increase by 10% from 20 September 2024.
Recipients of Centrelink/Department of Veterans Affairs payments and those receiving family tax benefit may also receive rent assistance if
they are paying rent or other rent like payments over a minimum fortnightly threshold.
The current maximum fortnightly rates are $188.20 for a single person and $177.20 combined for a couple.
The measure will cost $1.9 billion over five years from 2023–24 (and $0.5 billion per year ongoing from 2028–29), and builds on the 15%
increase in September 2023, taking the maximum rates over 40% higher than in May 2022.
The Government will provide funding of $2.2 billion over the next five years to deliver key aged care reforms and to continue to implement
recommendations from the Royal Commission into Aged Care Quality and Safety.
This funding includes the release of an additional 24,100 home care packages in 2024-25.
The Government has also agreed to defer the commencement date of the new Aged Care Act to 1 July 2025.
The Government is currently in the middle of considering and implementing changes to the way aged care is funded on the back of the Royal
Commission into Aged Care Quality and Safety report released in 2021.
This will likely impact home care and residential care fees in the future. Generally, with past reform we have seen existing residents and
home care recipients ‘grandfathered’ under the rules at the time they entered.
| Date |
20 March 2025 |
Currently, to receive the Centrelink Carer Payment, the care giver is required to not be involved in work, study or training for more than
25 hours per week. This is to reflect the requirement that to receive this payment the care giver should be providing the care recipient
with ‘constant care’.
From 20 March 2025, the existing 25 hours per week will be amended to 100 hours over four weeks.
This limit will no longer capture study, volunteering and travel time so will only apply to employment.
In addition:
| Date |
20 September 2024 |
The Government will extend eligibility for the existing higher rate of JobSeeker payment to single recipients with a partial capacity to
work (zero to 14 hours per week) from 20 September 2024.
Currently, those on JobSeeker payments aged 55 or over and who have been on the payment for nine continuous months receive a higher rate of
payment. These are:
| Relationship status |
Maximum payment per fortnight |
| Single with no children |
$762.70 |
| Single with dependent children |
$816.90 |
| Single 55 or older after 9 continuous months of payments |
$816.90 |
| Partnered (Each) |
$698.30 |
| Date |
12 months until 30 June 2025 |
When calculating Centrelink and Department of Veterans affairs payments, rather than assessing the actual income from financial investments,
a deemed rate of return based on the total value of these investments is assumed. Some common examples of financial investments include bank
accounts, term deposits, shares and managed funds.
The Government proposes to freeze the deeming rates (shown below) until 1 July 2025:
| Deeming rate |
Single |
Pensioner Couple |
| 0.25% |
Up to $60,400 |
Up to $100,200 |
| 2.25% |
Amounts over $60,400 |
Amounts over $100,200 |
| From |
1 January 2024 |
The Government will ensure that the cost of medicines remains low by freezing indexation:
The $1 optional discount available on patient co-payments for subsidised prescriptions will be reduced each year by the relevant notional
indexation amount until the $1 discount has been reduced from $1 to zero.
From 1 January 2024, you may pay up to $31.60 for most PBS medicines, or $7.70 if you have a concession card. The Australian Government pays
the remaining cost (with the exception of brand premiums and certain other allowable charges).
Housing initiatives address three key areas:
As previously announced, much of the Budget funding however flows to the States and Territories to increase housing stock, increase social housing, and provide crisis accommodation. New measures include:
|
Resources Media Release: Multi-billion-dollar investment to build more homes for Australians Treasury consultation: Build-to-rent tax concessions |
| Date |
From mid-2025 |
As previously announced, the Government has committed almost $1bn over 5 years to permanently establish the Leaving Violence Program – so those escaping violence can receive financial support, safety assessments and referrals to support pathways. Those eligible will be able to access up to $5,000 in financial support along with referral services, risk assessments and safety planning.