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Employer's guide to Federal Budget 2024-25
Budget focuses on cost of living
On Tuesday 14 May, the Federal Government handed down its Budget for 2024-25. It focused on tax cuts and other targeted cost-of-living relief measures, as well as investment in critical industries.
The key announcements included changes to strengthen the super system, Stage 3 tax cuts, business investment, and cost-of-living relief.
Changes to super
$60 million to support introduction of payday super
In the previous Budget, the government announced that from 1 July 2026, it would introduce payday super, under which employers will be required to pay super at the same time as they pay wages and salaries. The government earmarked $60 million over four years from 2024-25 to help employers and member representatives with education, training and implementation of payday super.
Super to apply to paid parental leave
From July 2025, 12% super will be introduced on government-funded paid parental leave. The government has committed $1.1 billion over five years to fund the payment. Currently at 20 weeks, the amount of paid parental leave, the government offers will increase by two weeks a year beginning in July until it reaches 26 weeks in 2026. Previously super was not paid on paid parental leave. This change is particularly expected to benefit women, who generally retire with less super than men, often due to taking time out of their careers to raise children.
Strengthening the super system against fraud
The Australian Taxation Office will get $187 million over four years to help it strengthen the super and taxation systems against fraud. This includes upgrades to information and technology systems to help detect real-time fraudulent activity.
Stage 3 tax cuts
The Stage 3 tax cuts, which take effect on 1 July 2024, will reduce the tax rate for Australians as follows:
- the 19% tax rate will be lowered to 16%
- the 32.5% tax rate will be reduced to 30%
- the tax threshold above which the 37% tax rate applies will increase from $120,000 to $135,000
- the tax threshold above which the 45% tax rate applies will increase from $180,000 to $190,000.
$1,542
$1,188
$354
$4,767
$3,963
$804
$13,217
$11,788
$1,429
$22,967
$20,788
$2,179
$40,567
$36,838
$3,729
$56,167
$51,638
$4,529
The Medicare levy remains payable in addition to income tax, although the threshold at which it kicks in will be raised.
Business investment
The government will invest $19.7 billion to turn Australia into a renewable energy superpower through its Future Made in Australia initiative. This includes tax incentives for green hydrogen, a $1.7 billion innovation fund for other renewables projects, and investments in solar panel manufacturing.
The $20,000 instant asset write-off – which enables eligible small businesses with aggregated annual turnover of less than $10 million to immediately deduct the full cost of eligible assets costing less than $20,000 once installed and ready for use – will be extended until 30 June 2025.
Cost-of-living relief
Energy price relief for 10 million households
Energy bill relief will be extended to every Australian household, with $300 automatically credited to energy bills next financial year at a cost of $3.5 billion. In the previous Budget, lower-income households were able to apply for a $500 energy bill credit. About a million businesses will also be eligible for a $325 energy bill credit.
Social security deeming rates freeze extended
The current freeze on deeming rates, which are used to determine the amount of income a person is deemed to earn from their financial investments, will be extended for another year. This will ensure income support recipients will not see a reduction to their payments due to an increase in the deeming rates over the next year.
Rental assistance maximum lifted by 10%
Commonwealth Rent Assistance maximum rates will be increased by 10% from September 2024, with the government providing $1.9 billion over five years from 2023–24 (and $0.5 billion per year ongoing from 2028–29) to fund the measure. It is expected to help address rental affordability in the housing market.
Older Australians
Home Care waitlists to be addressed
The government will invest $531 million dollars in the aged care sector to fund an additional 24,100 Home Care packages. It will also include $88 million to continue to attract and retain aged care workers.
Families
Leaving Violence payment and housing support
Women's safety received a boost with $925 million allocated to fund a Leaving Violence payment. This will provide those in violent relationships with $5000 to help meet the cost of leaving. The government will also provide $1 billion to fund crisis and transitional accommodation for women and children fleeing family violence and for young people through the National Housing Infrastructure Facility.
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Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.
Information on this webpage is provided by AIL and CFSIL. It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the target market determinations (TMD) for our financial products at https://www.cfs.com.au/tmd which include a description of who a financial product might suit. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.