Budget 2024-25: energy rebates, tax cuts, super changes announced
On 14 May, the Federal Government handed down its Budget for 2024-25. It focused on tax cuts, cost-of-living measures to ease the pressure on Australian households, and investment in critical industries.
For the second consecutive year, CFS was invited to the Budget lock-up at Parliament House in Canberra where we gained early access to the Federal Budget papers for 2024-25.
Here are our highlights, and an explanation of what these changes could mean for you if they become law.
00:00:00:00 - 00:00:24:02
Unknown
Good evening. The CFS team have just emerged from the Budget lock-up. And as expected, the key theme of tonight's Budget has been supporting Australians with cost of living pressures. One key announcement that's going to benefit all Australians is a $300 energy rebate. Now, this will automatically be applied to our energy bills in quarterly installments from the 1st of July this year.
00:00:24:02 - 00:00:43:04
Unknown
Other key winners from tonight's Budget are our retirement members and a couple of key initiatives here. A significant amount of funding for aged care reforms to to implement the recommendations from the Royal Commission, including 24,100 Home Care packages.
00:00:43:04 - 00:00:54:20
Unknown
In addition, we're also seeing a freeze on PBS, prescriptions for the co-payments for another 12 months and five years for pensioner customers.
00:00:54:20 - 00:01:07:23
Unknown
Pensioner members will also benefit from another 12 months freeze on the deeming rate, meaning that there will be no impact to the pension payments from investment earnings.
00:01:07:23 - 00:01:19:16
Unknown
The main superannuation announcement that we were already aware of was the payment of superannuation by the government for government funded parental leave.
00:01:19:22 - 00:01:23:12
Unknown
Now, this will mean up to about $106 per week.
00:01:23:12 - 00:01:41:04
Unknown
For those who are getting the paid parental leave payment, helping to address that superannuation gap, particularly between men and women. Now for more information about the announcement from tonight's budget, head to the CFS website at cfs.com.au, you in the news section.
Stage 3 tax cuts
Stage 3 tax cuts, which take effect on 1 July 2024, will reduce the tax paid by all working Australians by:
- cutting the 19% tax rate to 16%
- lowering the 32.5% tax rate to 30%
- increasing the threshold above which the 37% tax rate applies from $120,000 to $135,000
- increasing the threshold above which the 45% tax rate applies from $180,000 to $190,000.
$30,000
$1,542
$1,188
$354
$45,000
$4,767
$3,963
$804
$70,000
$13,217
$11,788
$1,429
$100,000
$22,967
$20,788
$2,179
$150,000
$40,567
$36,838
$3,729
$190,000
$56,167
$51,638
$4,529
Note, these amounts do not include Medicare levy.
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 electricity bills next financial year in quarterly instalments. In the previous Budget, lower-income households were able to apply for a $500 energy bill credit. About a million businesses will 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, such as age pension 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.
Changes to super
Super to apply to paid parental leave
From July 2025, 12% super will be introduced on government-funded paid parental leave at a cost of $1.1 billion over five years. 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.
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 places to address a backlog in the sector. It will also include $88 million to continue to attract and retain aged care workers.
Education
$3 billion to forgive student debt
About 3 million Australians with student loans are set to receive an average $1,200 reduction in their HELP or HECS debt, at a cost of more than $3 billion.
The reduction will offset steep increases in student debt last year when student loans were indexed to inflation at the rate of 7.1% but wages growth remained low. For many, that meant their debt increased faster than their ability to pay it.
HELP/HECS debt will now be indexed either to wages growth or to inflation, whichever is lower, and that change will be backdated to June 1 last year.
Other measures to make education more affordable include $320 a week to pay nurses, teachers, midwives and social workers during mandatory work placements and funding for 20,000 fee-free TAFE places for housing and construction workers.
Families
Leaving Violence payment
Women's safety received a boost with $925 million allocated to fund a Leaving Violence payment. This will provide those in violent relationships with $5,000 to help meet the cost of leaving.
$1 billion to house women and children fleeing domestic violence
The government will also provide additional housing support for women and children fleeing family violence.
The Budget includes $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.
Health
Freeze on cost of medicines on the PBS
The government will freeze the cost of medicines on the pharmaceutical benefits scheme until 2026 for the general population, and until 2030 for pensioners and concession card holders.
Urgent care clinics for Medicare card holders
As part of $8.5 billion earmarked for health spending, $227 million will go to opening 29 new Urgent Care Clinics that bulk-bill patients under Medicare.
The clinics, on top of the 58 already opened since July last year, will make it easier to access free healthcare after hours while easing the pressure on emergency departments.
Anyone with a Medicare card will be able to walk in to see a doctor or nurse for urgent, non-life-threatening ailments and minor injuries.
Cybercrime
App to flag data theft in real time
As part of continuing efforts to counter cybercrime, $11 million has been allocated to fund a smartphone app to combat identity theft. The app is designed to alert Australians in real time if someone tries to use their data to commit fraud, which should make it easier to prevent theft and recover funds.
Tools and Resources
Unleash in ways you never thought possible
Get in touch
Get in touch with us online or call us
8:30am to 6pm AEST Monday to Friday.
Find a financial adviser
Use our tool to find professional financial advice,
local to you.
Download mobile app
Track your balance and see your
transactions history from anywhere.
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.