Key Points
- The government has made several key funding announcements ahead of the upcoming federal budget.
- Treasurer Jim Chalmers will deliver the budget on 14 May.
- As well as tax cuts, funding has been allocated to tackle domestic violence and changes have been made to student debts.
The federal budget is always one of the biggest nights on the political calendar, and 2024 will be no different.
Treasurer Jim Chalmers will deliver the budget on Tuesday 14 May, but the government has already made several key funding announcements.
Here’s what we know so far.
The big picture
A second surplus is still the goal in 2023/24.
The mid-year budget review had forecast a deficit of $1.1 billion this financial year, narrowing from the $13.9 billion forecast in last year’s budget.
Inflation remains the primary economic challenge for the budget, but the slowing domestic economy is also emerging as a larger priority.
We know people are under pressure and that’s why our wages policies and tax cuts for every taxpayer are so important.
Treasurer Jim Chalmers
Stage three tax cuts
One of the most talked-about elements of the budget has been the which will come into effect from 1 July.
The overhaul will deliver savings for all taxpayers, with people on low and middle incomes receiving the largest cuts.
Workers earning $150,000 or more will still get a tax cut, but it will be more modest than what was offered under the initial package.
The average tax cut is forecast to be $1,888 in 2024–25 compared to 2023-24 settings.
The reformed stage three tax cuts will come into effect from July 2024. Source: SBS News / Kenneth Macleod
Future Made in Australia Act
The Future Made in Australia Act involves deploying public funds to help viable zero-carbon industries so they can attract more private investment.
Prime Minister Anthony Albanese has described the large-scale industrial policy as a “rebuild” of “Australia’s industrial base”.
Initiatives within the policy include the $1 billion Solar SunShot program, which aims to capture more of the global solar manufacturing supply chain.
The $2 billion Hydrogen Headstart program, which will encourage renewable hydrogen projects, and the $4 billion Critical Minerals Facility, which is to be the Australian Government’s central coordination point to grow sectors related to the metals and minerals used in emerging technologies, are also to come under the Act.
It also includes about $400 million in loans announced for Alpha HPA, a company supplying pure aluminium products for use in high-technology products such as lithium-ion batteries and LED lighting, and about $185 million in loans conditionally approved for Renascor Resources to support the development of projects and facilities.
Renascor Resources is a South Australian-based company developing a project to mine and purify graphite for use in lithium-ion batteries, which are used in a range of products including electric vehicles, electronic devices and power tools and for electricity storage.
Funding described by the federal government as being part of a “Health Research for a Future Made in Australia” package has also been announced ahead of the budget.
The majority of a $1.89 billion investment is set to go towards a Medical Research Future Fund which will have a number of focus areas including cancer, health inequities, women’s health, chronic pain and alcohol and other drug treatment.
More details on Future Made in Australia are expected to be revealed in the budget.
Students and HELP debt
The budget will bring some relief for students and people with student debt.
On 5 May, Education Minister Jason Clare announced the government will cap the Higher Education Loan Program (HELP) indexation rate, eliminating about $3 billion of student debt.
The capped rate will ensure indexation matches either the consumer price index or wage price index, whichever is lower.
The government will also introduce payments for student teachers, nurses and social workers during their compulsory work placements done as part of their studies.
Domestic violence
Funding to support women leaving violent relationships will be a key initiative of the May budget as Australia grapples with a national crisis.
On 1 May, following a snap National Cabinet meeting, the government committed to over five years to establish the Leaving Violence Program.
Those eligible will be able to access up to $5,000 in financial support along with referral services, risk assessments and safety planning.
The commitment builds on an existing $2.3 billion in measures put in place by the Albanese government.
Cost of living
The government has again been under pressure to lift income support payments.
The reworked stage three reform package is expected to be the main source of cost-of-living relief but other targeted measures are expected, which could include energy bill discounts.
Chalmers said the government and budget are “all about ensuring Australians earn more and keep more of what they earn”.
“We know people are under pressure and that’s why our wages policies and tax cuts for every taxpayer are so important,” he said.
“This is all part of a big focus in the budget on helping to ease cost of living pressures.
“Decent wages and bigger tax cuts for more people are a big part of helping people earn what they need and deserve to provide for their loved ones.”
Falepili Union with Tuvalu
Ahead of the budget, Foreign Minister Penny Wong has announced further commitments to the Australia-Tuvalu Falepili Union.
This will include investments of more than $110 million from Australia to address Tuvalu’s immediate priorities.
This includes $50 million in 2024-25 to support Tuvalu to secure its first undersea telecommunications cable and $19 million in extra support to extend the Tuvalu Coastal Adaptation Project.
It will also include $10 million in immediate budget support and $15 million for a new National Security Coordination Centre in Tuvalu.
National Firearm Register
Following a National Cabinet meeting in December, Albanese and state and territory leaders agreed to implement a national firearm register.
The register will allow law enforcement to access information about guns owned in all states and territories, and $160 million in funding will be spread across four years.
Almost $100 million will be spent on upgrades to systems operated by states, $30 million will be spent on building the national register, and a similar amount put aside for upgrades.
Housing
Australians have been feeling the effects of a lack of housing, especially social and affordable housing.
The government is set to unveil an $11.3 billion housing package as part of the upcoming budget.
The plans will be focused on achieving the target of 1.2 million new homes set by the government for the end of the decade — a target the National Housing Supply and Affordability Council has forecast the government will fall short of.
The government plans to invest $1 billion towards the development of crisis and transitional accommodation housing for families fleeing domestic violence.
Another key part of their plans will be a $9.3 billion boost over five years towards social housing.
A little more than $90 million of the upcoming budget has already been set aside to help boost the number of skilled workers needed in the construction and housing sector.
The funding will go towards fee-free TAFE courses and pre-apprenticeship programs in an attempt to provide the skilled workforce needed to increase housing supply.
Military and defence
In April, , including a $50 billion increase in defence spending over the next decade.
This increase in annual funding will mean the Defence budget will grow to more than $100 billion by 2033-34, and the Albanese government’s investment in the defence portfolio will see overall funding reach $765 billion over the decade.
Drought fund
An extra $519.1 million will go into the Commonwealth’s future drought fund to help regional communities get ready for dry times.
The fund aims to provide tools for farmers to manage drought on their properties and bolster their capacity to withstand climate change.
As part of the boost, $235 million will go towards drought resilience programs, while $137.4 million will be channelled into measures to help producers with business planning and financial literacy.
Trials for new solutions to drought mitigation will also be funded with a further $120.3 million.
– With additional reporting by the Australian Associated Press.
As a taxpayer, I appreciate the focus on tax cuts and tackling domestic violence in the federal budget. It’s crucial to support those on low and middle incomes while also addressing key societal issues. Looking forward to seeing how these initiatives will be implemented.