Treasurer Jim Chalmers will hand down the 2024-25 Australian federal budget, described as one that will ‘seek balance amongst competing priorities’. The main areas of focus for the next year will be cost of living pressures, tackling inflation, growth opportunities and investing in the future of the economy with the Future Made in Australia Act.
Set to be announced on Tuesday, 14 May 2024 at 7pm AEST, all eyes are on the Nation’s capital as the countdown begins. Once the federal budget has been announced, we’ll be sharing everything you need to know in an updated federal budget 2024-25 factsheet.
So, what can we expect to hear from Treasurer Jim Chalmers on budget night?
Cost of living relief
With Australians feeling the full force of the rising cost of living, it’s no surprise this is on everyone’s minds.
In addition to the previously announced personal tax cuts that are set to come into effect on 1 July, 2024, it’s expected there will be other measures – however not to the extent of the stage 3 tax cuts.
“There will likely be additional cost of living help in the budget, but it won’t be anywhere near the magnitude of the tax cuts,” Chalmers said.
Extension of the instant asset write-off up to $20,000
The instant asset write-off is set to end on 30 June 2024, however it’s likely we will see this date extended for another year. Under this initiative, small businesses are eligible to receive an immediate deduction for depreciable assets up to $20,000.
Currently, the eligibility criteria for the instant asset write-off is:
- Businesses with under $10 million in aggregated turnover;
- Businesses that first use or install the asset between 1 July 2023 and 30 June 2024
The $20,000 limit is based on a per asset basis, meaning that businesses can write-off multiple assets.
Superannuation on paid parental leave
In the 2024-25 federal budget, it’s expected that the government will announce superannuation for parents on parental leave.
From July 2025, the government will apply the superannuation payment to parents who are eligible during their parental leave. This will be a $1.1 billion initiative whereby an additional 12% superannuation will be added to the government-funded parental leave.
A focus on managing inflation
At the end of 2022, inflation peaked at a high of 7.8%. While it’s currently sitting at 3.6%, it’s expected this budget will help inflation fall between the target rate of 2-3%.
We can expect to see a range of initiatives announced on Tuesday night to help fight inflation and get back to the 2-3% target.
Initiatives across education and training
The government announced it will boost skilled workers in the construction and housing industries, allocating $90.6m to this initiative. This will go towards creating 15,000 fee-free TAFE placements and 5,000 placements for pre-apprenticeships.
The government also recently announced it will take $3 billion off student debt by changing the way HECS debt accumulates. Now, it will be calculated on consumer price index (CPI) or the Wage Price Index (WPI) – whichever of the two is lower for that year. This will be backdated to June, 2023 and will help reduce the financial challenges that students experience while completing tertiary education.
Future Made in Australia
Under the Future Made in Australia policy, the Government has announced funding for a range of projects. This policy is designed to support and fuel innovation in Australia, especially around sustainable energy.
We know that there’s been a $1 billion investment in quantum computing and $1.5 billion investment to increase medical manufacturing efforts. We also know there’s a $1 billion investment in “Solar SunShot” to increase solar manufacturing, and $566 million (over the span of 10 years) towards the tools to find new deposits of rare earths and critical minerals for renewable energy technologies.
Further details of the Future Made in Australia initiative are expected to be announced on Tuesday night.
Energy bill relief
It’s expected there will be energy bill relief in the 2024-25 budget. In early April, Anthony Albanese spoke of an existing policy introduced last budget, which provided small businesses up to $650 off of their power bills. This is something we might see extended in the 2024-25 budget announcement.
We’re keeping you across all the details of the Australian federal budget 2024-25
We can expect the 2024-25 federal budget to present both significant opportunities and potential challenges for Australian SMEs. By staying informed and proactive, you can stay across these changes to safeguard and grow your business.
We’re committed to supporting you through these changes, providing the tools and resources you need to manage compliance, hiring, and operational challenges efficiently. As the budget announcement is near, it’s more important than ever to stay engaged and prepared for the new economic landscape that will shape the future of Australian businesses.
Disclaimer: The information in this article is current as at 13 May 2024, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and to seek professional advice before making any decisions or relying on the information in this article.
