Budget 2024 – Individuals & Families
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Anne-Marie Tassoni, Partner
James Cummings, Manager

Dubbed “the budget for the decades ahead” by Jim Chalmers, the 2024 Budget places a significant emphasis on individuals and families, aiming to tackle the escalating cost-of-living burden faced by everyday Australians whilst curbing inflation. The Government is confident it can deliver on both accounts; but it is an experiment in navigating the delicate equilibrium between economic stability and social welfare.
Posted 15 May 2024

In case you missed the advertisements in the papers, television, radio and on public transport all over the country the past month, there will be “tax cuts for every taxpayer”. Tuesday’s Budget was used as a platform to restate what the Government has already legislated (which we wrote about in January); a revision of the previously legislated “Stage 3” tax cuts to extend the benefits to low-income taxpayers and reduce the benefit to high-income taxpayers.

Taking effect from 1 July this year, the new reform will:

  • reduce the 19% tax rate to 16%

  • reduce the 32.5% tax rate to 30%

  • increase the threshold at which the 37% tax rate applies from $120,000 to $135,000, and

  • increase the threshold at which the highest rate of 45% applies from $180,000 to $190,000.

At the forefront of the Government's initiatives to alleviate cost-of-living pressures, every Australian household will now be eligible for the $300 energy rebate; a benefit they expect to contribute a 17% reduction on the average power bill without unduly fuelling inflation.

Responding to criticism that their parental package in the 2022-23 Mid-Year Budget did not go far enough, the Government has announced that Superannuation Guarantee (12%) will be paid on top of Commonwealth-funded Paid Parental Leave, starting next July. This initiative falls into the “every little bit helps” category and is unlikely to make any significant contribution towards closing the gender disparity in retirement incomes, which is now at 25%.

Students rejoice, as interest rates on HECS/HELP and equivalent loans receive a makeover in the Budget. Pending parliamentary nod, debts will be indexed at a slower rate – the lower of either the Consumer Price Index (‘CPI’) or Wage Price Index (‘WPI’). This change will be backdated to June 2023, reducing the indexation from 7.1% to 3.2% by way of a credit against the outstanding debt. For a student with a $25,000 debt, this change will result in a debt reduction of up to $1,120 over two financial years.

The Government's pre-budget announcement revealed the largest measure aimed at supporting women – a nearly $1 billion commitment to make permanent a $5,000 payment for women escaping violent relationships. Moreover, given the alarming surge in domestic violence incidents, an extra $1 billion has been earmarked to finance crisis and transitional accommodation for victims.

The Budget features several social security and aged care measures aimed at assisting older Australians and those with lower incomes in coping with escalating costs:

  • Renters: for the 1 million Rent Assistance recipients, payments will increase by 10% from September.

  • Pensioners: deeming rates remain frozen for another year, averting welfare payment decreases for 876,000 recipients.

  • Aged Care: an additional half a billion dollars in the upcoming fiscal year will fund 24,100 more Home Care Packages, allowing older Australians to remain in their home and out of the public healthcare system for longer.

As partners in your investment journey, we monitor, examine, and navigate change. The Federal Budget is one such factor in our highly considered investment strategy and wealth management process.

This article is one part of our 2024 Budget series. To read more of our Budget commentary, click the links below:

–      Economic and Fiscal Implications

–      Small and Medium Business

For more information on our approach to wealth strategy and investment management, please contact us on +613 9655 5000 or contact our experts here.

Speak to one of our advisers to learn more: am.tassoni@cameronharrison.com.au

Sourced from:

The Commonwealth of Australia – Budget Papers; ATO; Photo by iStock