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Treasurer Jim Chalmers says his second budget is all about keeping pressure off inflation while helping people struggling to make ends meet.
“People are under the pump which is why we’ve carefully calibrated and designed this budget so that it takes pressure off the cost of living,” he said on Tuesday.
This is what that will mean for you, and what it will cost the government over the next four to five years.
Helping Australians deal with cost-of-living pressures is a particular focus in this year’s federal budget.Credit: Aresna Villanueva
Young families
- $1.9 billion for the extension of the single parenting payment, keeping single parents on the higher payments for an additional six years by lifting the cutoff age for the youngest child from eight to 14. This will put $176.90 extra in their pockets a fortnight.
- $3.5 billion to triple the Medicare bulk billing incentive for GPs, giving 11.6 million Australians greater access to free doctors’ consults.
- $18 million for $900,000 grants to build early childhood education and care centres in childcare deserts.
Middle-income households
- $1 billion in low-cost loans for improving the energy efficiency of homes, such as double-glazing and solar panels, for about 110,000 households.
- No extension to the Low and Middle Income Tax Offsets, meaning workers will receive up to $1500 less at tax return time this financial year.
- The government is forecasting its budget will take 0.75 of a percentage point off inflation, and expects wages to overtake inflation in the next financial year.
- Eligibility for the First Home Guarantee and Regional First Home Buyer Guarantee is being extended to any two borrowers jointly applying for a loan, beyond a spouse or de facto couple.
Welfare recipients
- $4.9 billion for an acoss-the-board lift in the base rate of JobSeeker and other income support payments by $40 per fortnight, taking the fortnightly rate of JobSeeker for a single person from $693.10 to $733.10 from September 20.
- The higher base rate of JobSeeker for over 60s will be extended to over 55s. This expanded eligibility is expected to benefit 52,000 Australians aged 55-59, more than half of whom are women, and will increase their payment by $92.10 a fortnight.
- $2.7 billion for a 15 per cent increase to the rate of Commonwealth Rent Assistance, providing up to an additional $31 a fortnight for about 1.1 million eligible households.
- $3 billion in combined federal and state funding for energy bill relief, with up to $500 deducted from power bills for more than 5 million households receiving welfare support over the next financial year.
Students/Young people
- 300,000 fee-free TAFE places from 2024 to 2026 for critical and emerging industries, subject to agreement with state and territories.
- Students on Youth Allowance, Abstudy and Austudy will benefit from a $40 per fortnight increase in their support payments. Many will also benefit from the lift to the rate of Commonwealth Rent Assistance, which will average at $24 more a fortnight for those paying over the maximum threshold.
- Indexation on university HECS loans will rise to 7.1 per cent in June, adding to the debt burden students will have to repay.
- $8.6 million to ensure one in 10 workers on a major federally-funded project is a trainee or apprentice.
Students on the Youth Allowance, Abstudy and Austudy will get an extra $40 per fortnight.Credit: Oscar Colman
High-income earners
- Earnings on superannuation balances over $3 million will be taxed at an increased rate of 30 per cent, up from 15 per cent from July 1, 2025.
- From July 1 next year, international trips will be $10 pricier each way with an increase in the Passenger Movement Charge from $60 to $70, bringing in a net $505 million in additional tax revenue.
- No changes to the stage three tax cuts, which are due to come into effect from July 1, 2024, removing the 37 per cent marginal tax rate for earnings over $150,000, and reducing the 32.5 per cent rate to 30 per cent for earnings between $45,000 and $200,000.
- After the 11th rate hike in 12 Reserve Bank board meetings, investors and mortgage holders are under increasing pressure.
Retirees
- Those with large savings accounts will benefit from RBA’s cash rate increases if their banks are passing them on. The official cash rate is currently 3.85 per cent.
- People will be able to purchase two months’ worth of medicines at a pharmacy for more than 300 different medications, saving up to $180 per year.
Small businesses
- $20,000 instant asset write-off for businesses with annual turnover of under $10 million for assets installed and used in the 2023-24 financial year.
- Up to 3.8 million small and medium-sized business to share in $310 million in tax relief through a new Small Business Energy Incentive, claimed as a 20 per cent deduction for the cost of eligible depreciating assets to support upgrading to more efficient electrical goods.
- $23.4 million to help 15,000 businesses build resilience to cyber threats.
- One million small businesses will get power bill rebates through the jointly-funded Energy Bill Relief Fund. NSW businesses will receive $650 in bill relief from July 1, while Victorian businesses will save $325.
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