2024-25 Federal Budget Update

Labor’s third Budget, unveiled on May 14, prioritised alleviating the cost of living for Australians. Treasurer Jim Chalmers emphasised its responsibility in balancing household support with economic stability. Key highlights include:

Tax Cuts:

• Stage 3 tax cuts, effective 1 July 2024, will provide all tax payers with tax savings.
• The savings range from $354 for those earning $30,000 to $4,529 for incomes exceeding $190,000.

The table below compares the amount of tax payable in 2023/24 to the amount payable under the new tax rates from 2024/25:

Credit: Colonial FS FirstTech 2024-25 Federal Budget Update

Note: these amounts do not include the Medicare levy.

Cost of living Measures:

• Energy bill relief: $300 credit for every household, with additional relief for small businesses.
• Extension of the freeze on deeming rates, protecting income support recipients from payment reductions.
• A freeze on maximum Pharmaceutical Benefits Scheme (PBS) patient co-payment increases, to provide access to cheaper medications.
• Rental assistance increase by 10% to address housing affordability.
• $3 billion allocated to reduce student debt, aiming to offset last year’s steep increases.

Superannuation:

• Introduction of 12% superannuation on government-funded paid parental leave from July 2025.

Small businesses:

• Extension of the instant asset write-off scheme for another year. This allows businesses with annual turnover under $10 million to claim up to $20,000 from eligible assets.

These measures aim to ease financial strains and promote economic stability while addressing key concerns such as energy costs, housing affordability, and gender disparity in retirement savings. It’s important to remember that many of these changes are proposals only at this stage and therefore may change before it becomes law.

If you have any questions about what the Budget proposals may mean for you, please contact your financial adviser.

This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs. For further information on anything that has been discussed in this article, please consider seeking qualified and professional advice.