Federal Budget Analysis 2024: Winners And Losers

Australian Taxpayers

The biggest cash splash of Budget night on May 14 was the much-debated stage three tax cuts, which were legislated by the former Morrison government and committed to by Labor before the party was elected. Labor has since tweaked the tax cuts to shift more of the largesse to lower and middle-income earners, inciting the ire of the Liberal Party who accused the government of breaking an election promise not to tinker with the tax cuts.

As part of the new stage three cuts, which the Opposition begrudgingly passed through the Senate earlier this year, Australian workers will receive a cut in the amount of income tax they pay from July 1. It is estimated the cuts will cost $324 billion over the next 10 years.

It means a worker earning $90,000 a year, will receive a tax cut of $1929. Chalmers estimates that disposable income will grow by an average of 3.5% this year, much of it from annual wage rises, but partly owing to stage three cuts as well, which will flow through to an estimated 14 million taxpayers.

You can read more about how much you will receive in our Guide to Stage Three Tax Cuts.

University Students

The government has confirmed it will eliminate $3 billion from student debts backdated to June last year. They will do this by indexing HECS and HELP debts to whichever is lower: the consumer price index or the wage price index. 

Previously all payments were indexed to inflation, and the new backdated rules mean a student with an average HECS debt of about $26,000, will have their HECS debt cut by about $1200, the government estimated. Approximately three million students will benefit.

Furthermore, from July 2025, around 70,000 student nurses, midwives, teachers and social workers will receive almost $320 per week during their obligatory work placements.

Tafes and Schools

The government will create 15,000 fee-free Tafe places, as well as around 5,000 pre-apprenticeships in a bid to boost the number of construction and housing sector workers.

The federal government will also help plug the gaps in school funding, negotiating with the states to partially cover a 5% back hole, and lifting the proportion of federal funding of state schools from 20% to 22.5%. 

 It’s part of a $60 billion-dollar package over four years. During his Budget speech, Chalmers also outlined a $350 million investment in fee‑free uni‑ready courses that help those who missed out on a place at university.

“Tonight, we are setting a national target of eight out of 10 workers achieving a tertiary qualification by 2050 and backing it in with new funding reforms to meet this goal,” he said.

Hospitals

Public hospitals will receive a boost, as the government thrashes out a new five-year funding deal with the states and territories that commences next year. As part of the Budget, the Commonwealth will set aside an extra $4 billion in funding in its 2025-26 agreement, as well as a boost of $13 billion over the course of the remaining five years.

The Medical Research Future Fund will also receive a shot in the arm, with more than $1.1 billion allocated for ongoing research; $500 million for new research projects; as well as a total of $300 million to investigate cancers with high fatality rates and inequalities within the healthcare system.

Bill-Paying Households

Rebates were valued at up to $500 per household last year, but targeted at the most vulnerable. This year, as part of a $3.5 billion package, every Australian will receive $300 this year to help with bill relief. One million small businesses will receive slightly more at $320.

“The ABS has shown how cutting energy bills directly cuts inflation too,” Chalmers said during his speech.

Electricity bills rose by 2% last year, but would have been much higher had the government not provided relief, Chalmers has argued.

It is estimated that electricity prices will rise again this year, after a decision by the Australian Energy Regulator (AER) to green-light price increases by electricity distributors over the next five years.

The five distributors, who service large swathes of The Northern Territory, New South Wales and Tasmania, cite inflationary pressure as the reason for the rises. The steepest increases will be in the NT, with electricity set to rise by $332 a year, for small businesses.

Childcare Workers

There was little surprise that the Budget included sweeteners for childcare workers, with the sector plagued by understaffing and low morale. Many childcare workers have left the industry: some have moved to the age-care sector after the government improved wages for these workers in its previous Budget.

To stem the exodus, Chalmers has announced a rise in child care wages, but was short on the amount. According to the Budget Overview details are “to be settled” after Fair Work Commission processes”.

Those Who Rely on Medications

Chalmers estimated that six out of 10 PBS scripts go to pensioners and concession card holders, and has allocated $3 billion in the Budget to help rein-in the cost of prescriptions by freezing the maximum the most vulnerable will pay for five years.

“Meaning no pensioner or concession cardholder will pay more than $7.70 for the medicine they need,” he said.

Working Parents

Remember the ‘Baby Bonus’ of 2002 that was designed to encourage women to have children? And few can forget former Treasurer Peter Costello’s maxim to have “one child for mum, one for dad and one for the nation”.

While Chalmers isn’t resuscitating that Liberal-era policy, he does want to help families, including working parents.

“I know that people will make their own choices and I don’t pretend for a moment that the government should direct those choices, but we want to make it easier for people to have bigger families if they want to,” Chalmers has previously told reporters.

As a result, the government has committed $1.1 billion for superannuation on government‑funded Parental Leave.

“When it comes to those first months of your child’s life, you can’t put a price on being there,” Chalmers says.

“And you shouldn’t pay a price for being there.”

Low-Income Renters

It’s been a bleak period for renters over the past few years, with landlords lifting rents by 11.5% over the past year alone, according to PropTrack’s Rental Report.  

In a bid to increase supply of homes, and place downward pressure on rents, the government has announced a $12.3 billion housing package, which comes on top of last year’s $10 billion Housing Australia Future Fund to build 30,000 social and affordable rentals.

The new package includes a $9.3 billion five-year agreement with the states on social housing and homelessness; $1 billion funding for states and territories to build the roads, sewers, and community infrastructure for homes to be built faster; and another $1 billion for crisis accommodation for women and children fleeing domestic violence. (The Leaving Violence Program, which provides up to $5,000 to women leaving violent relationships, will also be made permanent).

However, Swinburne University of Technology senior researcher, Stephen Glackin, poured water on the notion that the housing package would make much difference to our housing crisis.

“Housing is economically inelastic, meaning that it generally doesn’t respond to increased supply by bringing prices down,” he tells Forbes Advisor. 

“Unless you were to do something like double the number of houses it’s not going to have much effect.”

Glackin welcomed the boost for social housing but added: ”…there are a lot of checks and balances in social housing supply, so this may take years to roll out.”

Commonwealth rent assistance was increased by 15% in last year’s Budget, and Chalmers has made a similar commitment this year with a further 10% rise in a package that will cost $1.9 billion. Rental assistance is designed to help eligible pensioners and Centrelink recipients pay their tenancy costs.

East Coast State Roads

Infrastructure along the east coast of Australia has also received some much-needed funding with the government committing to an upgrade of the Bruce Highway ($467 million) in Queensland, new road projects in Western Sydney ($1.9 billion) and funding for Melbourne’s North East Link ($3.25 billion).

Urgent Care Clinics

There are 58 Medicare Urgent Care Clinics across the nation, providing free, walk-in treatment to patients after hours and on weekends to ease pressure on emergency departments. As part of the Budget’s $8.5 billion health package, these clinics will be increased to 87, with a greater share located in regional and rural parts of Australia.

The $227 million package also includes funding for longer treatment for women, with the Medicare rebate lifted on 45-minute gynaecology appointments to encourage more GPs to bulk-bill, and $361 million for the mental health system, including a national digital mental health service that will provide free support to 150,000 Australians a year.

Green Businesses

The Albanese Government recently announced the Future Made in Australia program, which is designed to reinvigorate Australian manufacturing and to insulate against future global supply shocks.

Green projects, in particular, will receive a boost, with $1 billion allocated to the Solar Sunshot production of solar panels in the Hunter Region of NSW; $6.7 billion over the next decade on a Hydrogen Production Tax Incentive to reward local hydrogen and renewable schemes; almost $1 billion into PsiQuantum’s world-first quantum computer in Brisbane; and $566 million for Geoscience Australia to map Australia’s soil and seabed, in an initiative known as Resourcing Australia’s Prosperity (RAP).

“The funding means (RAP) will be fully funded for 35 years—setting our resources industry up for decades of exploration and future economy-making discoveries,” prime minister, Anthony Albanese, said in a statement.

“For the first time RAP will map offshore areas of Australia as well, pointing the way for sites for carbon capture and storage, as well as possible sites for clean hydrogen projects.”

There will also be $100 million available to help speed up environmental approvals, so green projects can start sooner, and $1.5 billion to ramp up Australia’s manufacturing of medical supplies.

Small Businesses

Last year, the federal government temporarily increased the generous instant assets write off program threshold from $1,000 to $20,000 for small and medium-sized businesses with an annual turnover of less than $10 million.

It allowed businesses to write off the cost of assets for business purposes—whether it be cars, equipment or office supplies—in one tax return. Each asset less than $20,000 could be written off, meaning businesses could potentially claim on hundreds of thousands of dollars of equipment and supplies.

It applied to items used between July 1, 2023, and June 30, 2024 and was due to drop back to $1,000 for the upcoming financial year. As part of the Budget, it will be extended for another year.

Some Jobseeker Recipients

There is no doubt that it’s tough to make ends meet on the federal government’s Jobseeker payment. As a result, the Economic Inclusion Advisory Committee called forJobseeker to rise to 90% of the age pension—taking the current fortnightly payment of $762.70 for singles up to $1004.67.

It was an ambitious proposal and one that Chalmers had ruled out prior to Budget night.

In fact, there was no meaningful rise to Jobseeker in the Budget, which The Antipoverty Centre criticised by pointing out that unemployed people were not fuelling inflation. Spokesperson Kristin O’Connell told Guardian Australia “there was no such thing as a ‘responsible budget’ that left people in poverty”.

Chalmers, however, pointed to the extra $41 million to extend eligibility for the higher rate of Jobseeker.

“So people who can only work up to 14 hours a week will see their payment increase at least $54.90 a fortnight,” he said.

High-Earning Australians

While all Australians will receive a tax cut from July 1, those earning more than $145,000 will be worse off under the Albanese Government’s revised stage three tax cuts than under its original format.

For example, under the previous Morrison Government’s plan, an employee earning more than $200,000 a year would have received a tax cut of $9,075. But instead, under the revised plan, they will receive $4,529—a difference of $4,546.

Labor’s rejoinder has been to point out that more than 80% of employees are better off under its revised tax plan.

Large Corporates

Ahead of the Budget, tax leaders were calling on the company tax rate to be reduced from 30% to 25%, in line with the Morrison government’s Enterprise Tax Plan.

“While understandably this Budget (provides) cost-of-living pain relief for Australian households who are doing it tough, measures that also address mounting cost-of-business pressures should also be prioritised,” RSM Australia national tax technical director, Liam Telford, said.

“Not only would reducing the rate of corporate income tax for all companies to 25% bring Australia into closer alignment with the OECD average of 23.73%, but it would also remove inefficiencies inherent in the current two-tiered system, and enable Australian business to compete more effectively with foreign multi- nationals.”

RSM also called on the Government to make the ‘loss carry back’ rule—a refundable tax offset introduced in the Covid-era—permanent.

Neither of these measures was adopted in Tuesday night’s Budget.

Certain Defence Projects

With the Aukus nuclear-powered submarine deal the hot topic in defence circles, it is easy to overlook the fact that in some areas of defence investment is contracting.

Total defence spend is predicted to grow to 2.4% by 2033-34, up from 2.1% next year, but cuts are also being made to save some $73 billion, including scrapping the acquisition of a fourth squadron of F-25 aircraft and two large navy support vessels, as well as delaying upgrades to defence facilities in Canberra.

External Consultants

Finance minister, Katy Gallagher, has also found fat to trim with the government’s use of external consultants. In this year’s Budget, the cuts to the Big Four consultancy firms continue, saving the Budget an estimated $1 billion.

NDIS Fraudsters

The National Disability and Insurance Scheme has undoubtedly changed the lives of many of those who access it, but it is also facing cost blow-outs and allegations of fraud in some cases.

The Budget has allocated $469 million to “keep working with the disability community and the states and territories, and to crack down on fraud and exploitation”. The new compliance measures aim to save $14.4 billion.

• You can read the full Budget documents here.