Federal Treasurer Jim Chalmers last night presented the federal budget for 2024/2025. The budget comes amidst a cost-of-living crisis, high inflation, struggles in the construction sector and an income election.
The challenge was always going to be around helping Australians cope with rising costs without further fuelling inflation. The Labor Government said it focussed on building more homes and easing cost-of-living pressures among other bolstering measures. It forecasts that with this Budget, inflation will drop to 3.5% by the end of June and to 2.75% by the end of the next financial year.
Here are some of the key measures that may impact you.
Housing
Improved infrastructure: the Budget includes $1 billion to go to states and territories to build and improve infrastructure that can support housing developments. This includes roads, sewers, energy, eater and community infrastructure (including improved public transport).
Boosting the construction sector: nearly $89 million will create 20,000 new fee-free TAFE training spots to encourage more workers into construction and housing.
Rent assistance: Commonwealth Rent Assistance will see maximum rates increase by 10%, on top of the 15% increase that came into play in September 2023.
Social and crisis/transitional housing: a $9.3 billion investment is dedicated to building and repairing social housing to address homelessness across states and territories. $1 billion will go to crisis and transitional accommodation for women and children escaping domestic violence. Nearly $2 billion will also help community housing providers access concessional loans to deliver more social and affordable homes.
Student housing: There will be a cap on the number of international student enrolments for universities each year. If a university wants to exceed this limit, it will be required to build purpose-built student accommodation to be used by both international and domestic students.
Budgeting
Energy bill rebate: every Australian household will receive a total of $300 rebate with $75 applied automatically each quarter.
Tax cuts: announced in January, the stage 3 tax cuts apply to Australians earning more than $18,200 per year. This calculator can help you understand how much you may save with the tax cuts.
Student fees: annual HELP/HECS/VET and Australian Apprenticeship Support Loans indexation is proposed to change from being based on the Consumer Price Index (CPI) to be the lower of the CPI or the Wage Price Index. This would be backdated to 1 June 2023, meaning a credit may be applied to debts. This Government calculator can show you how much you may save.
Nursing, midwife, teaching and social work students will be eligible to receive a weekly payment during their prerequisite practical placements from July 2025
Apprentices and trainees in fields with skill shortages, such as construction, will receive a boost in payment ($5,000 up from $3,000). Employers will also receive an additional $1,000 incentive to hire and train more people in these sectors.
Superannuation for new parents: from 1 July 2025 Superannuation will be paid during the government’s paid parental leave for 20 weeks.
Medication: PBS-listed medications will remain capped at $31.60 for Medicare card holders for the next year, or $7.70 for concession card holders and pensioners for five years.
Small businesses
Extending instant asset write-off scheme: this scheme allows small businesses with an annual turnover below $10 million to claim a tax dedication on new equipment (such as a vehicle or machinery) up to the value of $20,000. Speak to your accountant for more information.
Energy bill rebate: Eligible small businesses will receive a total of $325 rebate on energy bills, applied quarterly.
These measures may relieve some pressure for some people saving for a deposit to purchase a house, or for households with a mortgage. You can also reach out to to a Loan Market broker to discuss your situation to see if you could save money. This could be help to set a plan to get you into your first home sooner, refinance to a loan better suited to your needs and goals or building your investment portfolio.
