We are so back.
Brace yourselves for the 2024-25 Budget overview.
Treasurer Jim Chalmers wants you to know your taxes are a little less all-consuming, he still promises to build you 1.2 million homes, he’s invested $22.7 billion dollars in minerals and clean energy manufacturing, he’s set up a direct phoneline for private investors and your call with your Gynaecologist will now be 45 minutes long (terms and conditions apply to all!).
Sprinkled frivolously amongst the budget is the assurance that this budget embodies “responsible economic management” in the face of growing cost-of-living pressures on everyday Australians. This sentiment is framed by a focus on reducing inflation and solidifying Australia’s position in the face of global economic uncertainty, Chalmers led the budget with the squeaky-clean promise: “easing pressures today and investing in a better future for tomorrow”. Noticeably absent from Chalmer’s speech and any ctrl-f endeavour on the thousands of pages of Budgetary documents include the Government’s realistic targets for addressing climate change efforts towards Net Zero, housing reform logistics like student accommodation and combatting workforce shortages.
The Budget’s impact on First Nation’s interests varies from investing a marked $4 billion to improve and address overcrowding in remote area housing in the Northern Territory, to safeguarding the Birthing on Country program planning and $2.4 billion to achieve better outcomes for First Nations people in areas including jobs, health, education, justice and housing. Assuring the Australian people that the Government is piling money into problem areas is a predictable strategy for budget communications; however, what remains foreign is how these bottom lines will facilitate sustainable consultation and advisory efforts.
Projected to deliver the first consecutive surplus in over two decades, Chalmers let a smile slip as he announced his pride in the Budget’s slashing of the predecessor’s years of deficit. Luckily, unlike last year’s surplus shenanigans that left Australians confused and wondering why a seemingly positive sentiment can leave them still with so much pressure, Chalmer’s Budget has attempted to combat this narrative by assuring that remedying the cost-of-living crisis was this year’s primary objective.
Chalmers repeatedly encouraged us to take a “longer term view” with the changes however failed to elaborate anywhere where “more student accommodation” will magically materialise, keeping a lot of his blue-sky claims just that — in the clouds.
But to be clear, blue-sky ideation is not the critique here. It is how Chalmers will manage the juggling act of achieving the nationalistic dream of a Future Made in Australia, fixing the inflation mess of the predecessors and combatting the cost-of-living crisis that lives rent-free on everyone’s lips. But picture Chalmer juggling these pressures with one hand and writing his speech in the other — strategically narrating his leading tagline, that this budget is equal parts “relief, restraint and reform”.
Chalmers broke down his budget to us in five key areas: Cost-of-living, More Homes for Australians, Future Made Plan, Universities & Skills and Medicare & Health.
Here’s what you need to know.
Cost of living: Parading your tax cuts, peanuts for paid placements and pleading with the Commonwealth
Cost-of-living is the leading pressure on Australians, creating unprecedent crises in housing, rent & general living conditions. Following the release of the Stage 3 tax cuts in January, Chalmers has expanded on its role in the budget and its downward pressure on the cost-of-living crisis and inflation. Foregrounding the Treasurer’s speech is that this budget brings a tax cut for every taxpayer. Questions remain on how the barely rent-paying payment of the Paid Placements will roll out, bracket creep increases and the impenetrable housing market will sustainably alleviate pressures on everyday Australians.
Key Impact:
- Waiving $3 billion in student debt for more than 3 million Australians
- Implementing Paid Placements to combat cost-of-living on students (conditional to certain course)
- Fiscal tax cut rollouts from the Stage 3 announcement (see points below)
- New power bill relief
- Boosting commonwealth rest assistance by 10 percent,
- 22, 000 Fee-free TAFE places
- Freezing social security deeming rates
- Investing support in Australians facing acute and urgent cost-of-living pressures.
Key Figures:
- Average tax cut of $36 per week for every Australian taxpayer
- $1.9 billion investment into Commonwealth Rent Assistance scheme representing a 15% increase made in September 2023 and 40% total since May, 2022.
- Commonwealth Prac Payment of $319.5 per week
- $3.5 billion for $300 in energy bill relief to all Australian households, plus relief for one million small businesses
- Energy bill relief and rent assistance are estimated to directly reduce headline inflation by half of a percentage point in 2024–25 and are not expected to add to broader inflationary pressures.
Stage 3 Tax Cut Summary:
From 1 July this year, as part of the Stage 3 Tax Cuts the Government will:
- Reduce the 19% tax rate to 16%
- Reduce the 32.5% tax rate to 30%
- Increase the income threshold above which the 37% tax rate applies from $120,000 to $135,000.
- Increase the income threshold above which the 45% tax rate applies from $180,000 to $190,000.
- All 13.6 million Australian taxpayers will get a tax cut, with an average tax cut of $1,888 or $36 a week
More Homes for Australians: Who will build them, how long will they take and will I ever move out of my parents’ home?
Put simply: students, who knows how many years and probably no. Attempting to understand let alone break into the renting market feels Sisyphus-like in nature. Despite the ongoing national workforce shortage in the construction industry, the government remains shockingly confident in building those promised homes by 2030. The Budget also said they will build “more student accommodation”. That’s it. That’s all they said. How? We do not know.
However, with bright eyes and a wide grin Chalmer’s answer to the housing crisis remains steadfast: pencil in over a million homes and hope 20,000 TAFE students we are yet to train will be ready to build them before the scary deadline arrives.
Key Impacts
- Facilitating International buyers through the ‘Build to Rent’ program incentivised with a lower foreign investment free providing compliance with the program’s development parameters
- 1.2 million homes remain promised to be delivered by 2030
Key Figures
- Additional $6.2 billion investment into New Housing for a total of $32 billion under the government
- $88.8 million invested into Fee Free TAFE places in to deliver 20,000 places in upskilling in sectors pertaining to the Construction sector
Future Made Vision: is it more than a blue-sky marketing model?
Conveniently disguised by the mist of the cost-of-living crisis fog, the government has moved forward with the $22.7 billion invested Future Made Vision plan which includes the transformation to net zero and global decarbonisation. This vision leads with intention of “encouraging and facilitating the private sector investment needed to make the most of this [budget] opportunity”. This plan aims to maximise economic benefit by investing in mineral extraction, facilitating private sector investments and investing in quantum computing capabilities all whilst attempting to reach net zero targets — which on face value seems like a walking contradiction.
Key Impact:
- Heavy investment in critical minerals, renewable hydrogen, green metals
- Incentives to achieve decarbonisation.
- Investment in Quantum computing with ‘Psi Quantum’: Queensland based-project to develop computing capabilities
- New front door for investors: establishing pathways to attract more global domestic capital through joined-up investment approach
- Establishing a single point of contact for investment opportunities
Key figures:
- Investing $466.4 million to building quantum computing capabilities
- Provide a $2 incentive per kilogram of renewable hydrogen produced for up to ten years per project for projects that reach final investment decisions by 2030
- Issuance of $7 billion in green bonds
Universities & Skills: Let us pay you $8 to fix our problems
Whilst we encourage you to refer to Honi Soit’s in-depth analysis of the Budget’s impact on the Education sector, here is a basic breakdown of a few must-know points.
Key Impact:
- Needs-based funding delivered to universities to spend on activities to support underrepresented students
- Paltry placement payments for students on prac
- Review into racism on campus including cases of anti-semitisim and Islamophobia
- National Student Ombudsman to be introduction to address safety on campus
- The budget responds to 29 of 47 of the Universities Accord recommendations
Key Figures:
- Investing $1.6 billion over five years to reform tertiary education systems
- Investing $500 million in upskilling and training in priority industries to support women’s participation
- 40% of Student Services and Amenities Fees to be allocated to student run societies and services
- HECS indexation slashed to 4%
- National student Ombudsman to be allocated $19.4 million over 2 years
- $18.7 million invested over 4 years to establish a National Higher Education code to respond to Gender-based violence and informed education standards
Women’s, Medicare & Health: Gendered violence, Paid Parental Leave and Endometriosis Care
Although Chalmers initially labelled his 5th main point as “Medicare and the Care Economy” Honi Soit revised this title to include Women’s given its 3rd year as a portfolio in the budget and its increasing urgency in combatting Gendered Violence, reproductive health, social reform and informed care measures. This dismal but unsurprising omission from the topline description should not take away from the important reform that must occur if we are to ever see nationwide improvement in the healthcare industry. What one should lookout for includes improvements to Paid Parental Leave conditions, reforms to Medicare and the care economy and increased access to PBS medicine, endometriosis care and women’s clinics.
Key Impact:
- New statistical dashboard to combat Gendered Violence to be released in mid-2024 to inform law enforcement, police making and family, domestic and sexual violence sector
- Patients with endometriosis and pelvic pain to access subsidised consultations of 45 minutes or longer with gynaecologists
- Government funded paid parental leave will now receive $1.1 billion in superannuation
- 12.5 million over four years to National Aboriginal community controlled health organisations to facilitate community-led, culturally advised distribution of free period products
5 Priority Areas for the Women’s Budget Statement
- Gender-based violence
- Unpaid and paid care
- Economic equality and security
- Health
- Leadership, representation and decision-making
Key Figures
- $49.1 million invest for longer gynaecology consultations to address vulnerable populations and time-critical treatment such as medical termination,
- Investing $3.4 billion in National Plan to End Violence against Women and Children (2022-2032)
- $925.2 million for victim survivors leaving violent intimate partner relationships
- $2.8 billion invested in Medicare
- $90 million in workforce shortages by making it quicker for international practitioners to work in Australi
Look out for more Honi Soit coverage on the Women’s Budget Statement.
Where to now?
The real test for this budget is not the semantics of Chalmers’ boasting budget speech, nor is it the spotlighted consecutive surplus. It will be next year’s Federal Election where voters will decide whether Labor has done enough on cost-of-living and managed the fiscal economy with enough rigour to address flailing Net Zero targets and health and welfare reform. Although the budget appears to be addressing short term calls for relief, the long term durability is fragile when forecasted. As many would expect if there are interest rate rises or the economy starts to dip into recession, Labor could be in trouble.
Refer to Honi Soit’s student guide, Higher Education environment analysis, impact on International students and Paid Placement analysis for more in-depth coverage.