The Australian Federal Budget for 2024-2025, presented by Treasurer Jim Chalmers, outlines the government’s financial plans and priorities for the upcoming fiscal year. This budget addresses various aspects of the economy, with a focus on easing the cost of living, investing in future growth, and ensuring the well-being of all Australians. Here, we delve into the key areas of the budget, including tax cuts, cost-of-living measures, education, housing, and more.


  Stage 3 Tax Cuts

–  Changes to Stage 3 Tax Cuts: The government has revised the Morrison Government’s Stage 3 tax cuts to favour low and middle-income earners. The changes, passed unamended by the House of Representatives and the Senate on 27 February 2024, halve the tax break for wealthier taxpayers while increasing the benefit for those on lower incomes.

–  Implementation: Effective from 1 July 2024, these changes ensure that the tax system remains progressive while addressing bracket creep. The Tax Office will automatically take less tax from pay packets, simplifying the process for taxpayers.


  Cost of Living

–  Energy Bill Relief: Starting 1 July 2024, every household will receive a $300 energy rebate, and around one million small businesses will get a $325 rebate. This initiative is expected to cost $2.617 billion in 2024-25 and $872 million in 2025-26 and is projected to reduce headline inflation by approximately 0.5% in 2024-25.

–  Rent Assistance: The budget allocates $1.9 billion over five years to increase the maximum rates of Commonwealth Rent Assistance by an additional 10%, benefiting nearly one million households.

–  Social Security Deeming Rates: A 12-month freeze on social security deeming rates will continue until 30 June 2025, aiding around 876,000 income support recipients, including approximately 450,000 Age Pensioners.

–  Treasurer’s Speech: Treasurer Jim Chalmers emphasised that these measures deliver tax cuts for every taxpayer, provide power bill relief, freeze the cost of medicines, make student loans fairer, boost competition, and support renters.



–  Student Debt Relief: The government will reduce the indexation of accumulated student contribution debt, wiping more than $3 billion from accumulated debt for over three million people. The new indexation system, backdated to June 1, 2023, will cap the HELP indexation rate to the lower of the Consumer Price Index (CPI) or the Wage Price Index (WPI).

–  Student ‘Prac Payments’: From 1 July 2025, higher education students on clinical and professional placements will receive a means-tested payment of $319.50 per week. This measure aims to alleviate financial strain on students, particularly those in teaching, nursing, midwifery, and social work and is expected to benefit about 68,000 higher education students and over 5,000 VET students annually.


  Future Made in Australia

–  Investment Plan: The $22.7 billion Future Made in Australia package aims to attract investment in key industries and make Australia an essential part of the global economy. This includes:

–  National Interest Account: Expanded to provide financial support for projects aligning with national interests, costing $911 million in 2024-25 and $2.658 billion over the forward estimates.

–  Investment Attractiveness: $15.7 million for a streamlined approach to foreign investment.

–  Cheaper, Cleaner Energy: $27.7 million to support the development of consumer energy resources.

–  Innovation Fund: $1.7 billion Future Made in Australia Innovation Fund to accelerate new industries.



–  Increased Support: The budget allocates $1.9 billion to increase Commonwealth Rent Assistance by 10%. Additionally, it includes $1 billion to help states and territories build more housing, $1.9 billion in loans for 40,000 social and affordable homes, and $1 billion towards accommodation for women and children fleeing domestic violence.

–  National Cabinet Agreement: A $12.3 billion package was agreed upon to ease housing shortages, including new support for women and children needing shelter after fleeing domestic violence.


  Violence Against Women

–  Leaving Violence Program: The government will invest $925 million over five years to establish the Leaving Violence Program, providing $5000 in financial support to women. This replaces the previous Escaping Violence Payment and begins in mid-2024.

–  Additional Measures: This commitment builds on a record $2.3 billion in measures aimed at ending violence against women and children.



–  Permanent Migration Program: The 2024–25 planning level is set at 185,000 places, with 132,200 allocated to the Skill stream. The program planning horizon will extend to four years from 2025–26.

–  Net Migration Intake: The budget forecasts a reduction in net overseas migration from 528,000 last year to 395,000 this year, and 260,000 next year, aiming to stabilise around 235,000 per year post-2025.


–  Investment in Defence: The government will invest $330 billion over the next decade to support the Australian Defence Force (ADF), including an additional $50.3 billion for capabilities such as long-range strike capability and modernising the Royal Australian Navy’s surface combatant fleet.

–  Strategic Military Enhancements: This includes a $5.7 billion boost over the next four years and $50 billion over the next decade for strategic military capabilities.



–  Urgent Care Clinics: An $8.5 billion investment over four years includes $227 million for 29 new urgent care clinics to ease pressure on hospital emergency departments.

–  Medicare and PBS: $49.1 million to increase Medicare rebates for long gynaecology appointments and additional funding for new treatments under the Pharmaceutical Benefits Scheme (PBS).


Aged Care

–  Funding Increase: New spending of $2.2 billion to implement more recommendations from the Aged Care Royal Commission, including $1.2 billion for system improvements and $531 million for 24,000 new home care packages.



–  Parental Leave Super: $1.1 billion to pay superannuation on government-funded parental leave.

–  Super Guarantee: From 1 July 2024, the Super Guarantee will increase to 11.5%, continuing to 12% by 2025. Superannuation will also be paid with salary and wages from 1 July 2026, aiming to tackle unpaid super and enhance returns for workers.


National Disability Insurance Scheme (NDIS)

–  Investment and Reforms: $469 million to work with the disability community and crack down on fraud. The budget projects an increase in NDIS payments by $1.3 billion in 2023–24 and $15.9 billion over five years.


Australia’s 2024-2025 Federal Budget represents a significant commitment to addressing immediate economic pressures while laying the groundwork for future growth and stability. By focusing on tax reforms, cost-of-living relief, education, housing, and key sectors like health and defence, the government aims to create a resilient and equitable economy.

For detailed advice on how these budget measures might affect you or your business, contact Allied Accountants. We’re here to help you navigate the complexities of the new financial landscape.


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About the Author: David McKeller

David McKellar is a Chartered Accountant and Director of Allied Business Accountants, an accounting firm specialising in providing strategic advice and taxation services to business owners, investors and Self Managed Superannuation Funds.

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