5 Things to know from the Federal Budget 2024-25
Skip the clickbait: Here’s 5 items from the budget worth your attention…
Treasurer Jim Chalmers delivered the Federal Budget on Tuesday 14 May 2024.
Once you clear past the clickbait news headlines, there’s only a handful of things that could affect the everyday Australian.
So let’s cut straight to it… 5 items from the budget worth your attention:
1. Energy Bill Relief Fund
A non-means tested $300 energy bill rebate will go out to all Australian households to offset energy bills in the 2024-25 year. The rebate will be applied quarterly at $75 per quarter. It is automatic, so there’s nothing you need to do.
2. Super paid on Government-funded Paid Parental Leave
Subject to the passage of legislation… The government will pay super on the Government funded Paid Parental Leave for babies born or adopted on or after 1 July 2025.
Eligible parents will receive an additional 12% of their Government-funded Paid Parental Leave as a contribution to their superannuation fund.
Speaking of super… From 1 July 2026, Super Guarantee entitlements will be paid more regularly by your employer to your chosen fund, as part of the Government’s workplace relations agenda. Currently, employers are only required to pay super contributions on a quarterly basis.
3. Stage 3 tax cuts, effective July 1
The legislated Stage 3 tax cuts will result in tax savings for all taxpayers.
The table below compares current tax rates and thresholds for 2023/24, to the new tax rates from 2024/25.
The table below compares the amount of tax payable in 2023/24 to the amount payable under the new tax rates from 2024/25.
Middle-income earners will receive a substantial tax saving. For example, a taxable income of $100,000 will save $2,179 per year.
4. Reducing indexation of student debt
Government will cap the HELP indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI) with effect from 1 June 2023. The WPI indexation in 2023 was 3.2 per cent.
This relief will be backdated to last year, meaning the 7.1 per cent indexation already debited will likely drop back to the 2023 WPI (3.2 per cent) and a credit will appear in the balance after June 1.
The aim of this relief is to ensure indexation on education debt does not outpace wage growth, as it did in the last 12 months due to the big spike in inflation.
5. Increasing the Medicare levy low-income thresholds
The Government has increased the Medicare levy low-income thresholds for singles, families, and seniors and pensioners from 1 July 2023 to provide cost-of-living relief. The increase to the thresholds ensures that low income individuals continue to be exempt from paying the Medicare levy or pay a reduced levy rate.
Singles from $24,276 to $26,000
Families from $40,939 to $43,846
Single seniors and pensioners from $38,365 to $41,089
Family seniors and pensioners From $53,406 to $57,198
A quick note to the business owners: The government announced it would extend the $20,000 small business instant asset write-off by 12 months until 30 June 2025. There is also direct energy bill relief for small businesses ($325) in 2024-25.
Still reading? Here’s a few more (cheeky) facts about federal budgets.
There seems to be little correlation between budgets outcomes and equity market performance (unless a recession inspires a deficit)
Budgets are changed every year
Treasury economic forecasts are often inaccurate (take the recent surprise surplus from commodities, or any unemployment forecast in the past decade)
So next time the budget night is on… Turn off the TV, make a cup of tea and get to bed early!
Sources: Colonial. Budget Papers.
Note: Information is general in nature and is not personal financial or tax advice.
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