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Federal Budget Announcement Summary 2024

Last night, the Treasurer, The Hon Dr Jim Chalmers MP, handed down a Budget that he described as a responsible Budget to help people battling cost of living pressures, address housing challenges, and prioritise responsible economic management set to produce a surplus and help fight inflation.

Below are some key measures that may be of keen interest to you.

Superannuation

This year’s budget included relatively few measures impacting superannuation.

The previously legislated increase to lift the Superannuation Guarantee to 12% will occur next year on 1 July 2025, while the draft legislation to reduce tax concessions on total super balances above $3 million has been finalised and is slated to proceed to the Lower House for consideration.

Paid Parental Leave Enhancement for Superannuation

Improving women’s retirement outcomes by paying superannuation on Commonwealth government-funded paid parental leave for births or adoptions after 1 July 2025. Eligible parents will receive an additional payment based on the Superannuation Guarantee of 12% of their paid parental leave payments as a contribution to their superannuation fund.

Taxation

Amended Tax Cuts

As previously announced, from 1 July 2024, the Government will provide tax cuts to more taxpayers, easing the cost of living pressures and offsetting bracket creep, by:

·        Reducing the 19 per cent tax rate to 16 per cent

·        Reducing the 32.5 per cent tax rate to 30 per cent

·        Increasing the income threshold above which the 37 per cent tax rate applies from $120,000 to $135,000

·        Increase the income threshold above the 45 per cent tax rate, which applies from $180,000 to $190,000.

New individual rates and thresholds

These measures have already passed both Houses of Parliament and received Royal Assent.

Estimate your tax cut by visiting https://taxcuts.gov.au/.

Increasing Medicare Levy Low-Income Thresholds

The Government has increased the Medicare levy low-income thresholds for singles, families, seniors and pensioners from 1 July 2023 to ensure that low-income individuals continue to be exempt from paying the Medicare levy or pay a reduced levy rate to provide cost-of-living relief.

This measure has already been provided for by the government.  

Reducing Cost of Living Pressures

Power Bill Relief

From 1 July 2024, every household will receive a $300 rebate on their electricity bills. This is expected to reduce headline inflation by around 0.5% in 2024-25.

Boosting Commonwealth Rent Assistance

From 1 September 2024, the Government will increase Commonwealth Rent Assistance maximum rates by 10% to help address rental affordability.

Cheaper Medicines

The Government will pause indexation on the maximum Pharmaceutical Benefits Scheme co-payment for everyone with a Medicare card and a five-year freeze for pensioners and other concession cardholders who will pay no more than $7.70 for their PBS medicines.

Student Debt Relief

The Government will cap the indexation rate on all Higher Education Loan Program debts (and other student loans) to be the lower of the Consumer Price Index or the Wage Price Index. This is intended to apply retrospectively to include all loan accounts on 1 July 2023.

Freezing Social Security Deeming Rates

The freeze on social security deeming rates for financial investments will remain current until 30 June 2025.

Read more about the Deeming rules at servicesaustralia.gov.au/deeming.

Strengthening Medicare and Building a Better Health System

The Government is investing significantly to continue its commitment to strengthen Medicare and build a better health system, including:

·        Support older Australians in avoiding hospital admission, being discharged earlier, and improving their transition out of hospital to other appropriate care.

·        Increasing the number of urgent care clinics across Australia.

·        Addressing health workforce shortages by making it simpler and quicker for international health practitioners to work in Australia.

·        Additional funding for research and services for people living with chronic conditions, including bowel and skin cancer, diabetes and dementia.

·        $3.4 billion for new and amended listings to the Pharmaceutical Benefits Scheme

·        Upgrading the national Medicare Mental Health Centres network to be open by 30 June 2026 and establishing a free, low‑intensity digital service from 1 Jan 2026.

·        Delivering Aged Care reforms, releasing more home care packages, investing in critical digital systems to better support introducing the new Aged Care Act, and increasing the award wage for aged care workers.

·        Provide additional funding to support people with disability, fight NDIS fraud and get the NDIS back on track.

Better Homes for Australians

Addressing Housing Pressures

The Government will invest $6.2 billion in specific housing initiatives to expand on existing initiatives being delivered through the National Housing Accord, Housing Australia Future Fund and Social Housing Accelerator, including:

 

·        The previously mentioned boost to Commonwealth Rent Assistance

·        $1 billion to the States and Territories to deliver new homes and essential services infrastructure

·        Developing regulations to require Universities to increase their supply of student accommodation

·        A new five-year National Agreement on Social Housing and Homelessness including the doubling of dedicated funding for homelessness

·        Providing additional concessional loans to community housing providers and other charities to support new social and affordable housing under the Housing Australia Future Fund and National Housing Accord

Better Transport Infrastructure

The Government will provide $9.5 billion for transport infrastructure projects across the States and Territories to deliver more efficient regional transport by building new roads and rail extensions.

Investing in a Future Made in Australia

The Government’s $22.7 billion Future Made in Australia package will help facilitate the private sector investment required to create new jobs and opportunities through a series of initiatives, including:

 

·        Attracting and enabling investment in priority areas, focusing on industries that contribute to the net zero transformation

·        Streamlining environmental, energy, planning, cultural heritage and foreign investment approvals.

·        Promoting private sector investment in sustainable activities.

·        Invest further in renewable energy, such as integrating solar panels and batteries into the grid.

·        Establishing limited-time incentives, including the Hydrogen Production Tax Incentive.

·        Backing the resources sector and strengthening critical mineral resources supply chains.

·        Manufacturing clean energy technologies.

·        Investing in new technologies and capabilities.

·        Reforming tertiary education, including additional funding for skills and training to support women’s participation in priority industries; providing a Commonwealth Prac Payment to support students undertaking mandatory placements; and broadening access to University.

·        Expanding the New Energy Apprenticeships program to work in the clean energy sector, including construction and manufacturing.

·        Maintaining the $5,000 support payments to apprentices in priority occupations until 1 July 2025.

·        20,000 new free TAFE places including pre-apprenticeship courses relevant to the construction sector.

·        Targeted support to help small businesses.

·        Measures to improve Australia’s response to natural disasters and better prepare for drought and climate change.

Please feel free to contact us at clientservices@primefinancial.com.au to book a time if you would like to discuss the proposed Federal Budget further.

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