May 14, 2024

2024 Australian Federal Budget Summary

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"It’s a responsible Budget that helps people under pressure today – and invests in the promise and potential of the more prosperous future we can make together."

- Treasurer Jim Chalmers

Fresh out of the Budget Lockup, here is what you need to know:

  • Labor’s Jim Chalmers has handed down his third Budget as Federal Treasurer.
  • A Budget surplus of $9.3 billion for 2023-24 has been reported, this is the second consecutive surplus for the Albanese Government.
  • Headlining the Budget is a $300 energy bill rebate for every Australian household and a $325 rebate for one million small businesses.
  • Further cost of living relief is found in the previously announced changes to stage three tax cuts, HECS indexation reform, and a 10% increase in Commonwealth Rent Assistance.
  • The Budget also includes $16.5 billion in additional funding for infrastructure projects, $6.2 billion for housing, $22.7 billion for the Future Made in Australia Agenda (over 10 years), and $2.8 billion for Medicare.
  • An additional $50.3 billion will be put towards implementing the Defence National Strategy.
  • The Budget position is significantly better than initially forecast in the Mid-Year Economic and Fiscal Outlook (MYEFO), where a $1.1 billion deficit for 2024-25 was forecast.
  • This is due to larger-than-expected company tax receipts from higher-than-expected commodity prices (even though they have fallen significantly since last year’s Budget) and higher income tax receipts from a continued strong local labour market and inflation-driven bracket creep.
  • Extraordinarily, the Budget papers show that bracket creep has accounted for around 45% of the increase in income tax receipts over the last two years.
  • The Government expects the Budget to then fall into a $28.3 billion deficit from next year as commodity prices fall, the domestic economy weakens, and fiscal spending increases.
  • The Government does not project a cash rate cut until mid-2025, echoing the Reserve Bank of Australia’s message last week.
  • This is generally a restrained Budget with targeted cost of living relief towards households.
  • There will be speculation that this Budget may be indicative of an early election, a claim that Chalmers denied during a Budget Lockup interview.
  • The main form of criticism from the Opposition will likely be the accusation that the $9 billion in additional spending will be inflationary.

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