The Federal Budget for 2024-25, the third handed down by Treasurer Jim Chalmers, delivered a back-to-back surplus for the first time in nearly 20 years built on high commodity prices and strong employment.

Key features of this Budget include modified stage 3 tax cuts, targeted cost-of-living relief, an extension to the instant asset write-off for small business and substantial industry incentives.

The Budget provides forecast of a challenging 2024-25 with economic growth remaining modest and unemployment continuing to rise. However, the Government expects its targeted cost-of-living relief measures to bring inflation back within the Reserve Bank of Australia’s target range in 2024-25.

Key measures

Future made in Australia: a $22.7 billion industry package offering tax incentives, subsidies and grants to bolster the economy as it shifts towards a clean-energy future. This includes a $1.7 billion innovation fund that could benefit SMEs and startups. NSW benefits from a share in the $1 billion investment for solar panel subsidies.

Stage 3 tax cuts: From 1 July 2024, 13.6 million taxpayers will receive tax cuts. The average benefit will be $1,888 per year, or $36 per week.

Energy bill relief: $325 for eligible small businesses and $300 for every household from 1 July 2024.

Housing: $11.3 billion towards building new homes. This includes $1 billion for roads, sewers, energy, water and community infrastructure, a doubling of Commonwealth homelessness funding to $400 million every year (matched by states and territories) and $9.3 billion for a 5-year National Agreement on Social Housing and Homelessness.

Instant asset write-off: instant asset write-off to be extended until 30 June 2025, allowing businesses with turnover under $10 million to deduct the cost of eligible assets under $20,000.

Supporting small business: $10.8 million over two years to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program.

Apprenticeships: Employers taking on apprentices in priority areas will be eligible for an additional $1,000 ($5,000 in total) to help subsidise costs associated with employing an apprentice. Individual apprentices training in priority areas will be eligible for an additional $2,000 ($5,000 in total) to assist them to undertake and complete their training.

Students: $89 million for 20,000 more fee-free TAFE and VET places for tradie trainees.

FISCAL AND ECONOMIC OUTLOOK

Budget balance & net debt: A budget surplus of $9.3 billion (0.3% of GDP) is projected for 2023-24, upwardly revised from the deficit of $1.1 billion forecast in December 2023. A budget deficit of $28.3 billion (1% of GDP) is expected in 2024-25 and the shortfall is forecast to widen in 2025-26. Net debt is expected to rise in dollar terms to $499.9 billion but fall as a share of GDP to 18.6% in 2023-24. However, net debt will rise over the four years from 2024-25 in both dollar and share of GDP terms.
Economic outlook: GDP growth is projected to slow from 3.1% in 2022-23 to 1.75% in 2023-24 before rebounding to 2% in 2024-25.
Unemployment: The unemployment rate is expected to rise to 4% at the end of 2023-24 and further increase to 4.5% in 2024-25.
Inflation: CPI growth is forecast to moderate to 3.5% in the June quarter of 2024 and further decelerate to 2.75% in the June quarter of 2025.
Wage growth: Real wage growth is projected to return in 2023-24, with wages rising 4% (compared to inflation of 3.5%). Wage growth is expected to moderate to 3.25% in 2024-25, still above the forecast inflation of 2.75%.

HIGHLIGHTS FOR BUSINESS

Tax

Stage 3 tax cuts: 13.6 million taxpayers will receive a tax cut from 1 July 2024, with the average amount being $1,888. The revised brackets will particularly benefit low and middle-income workers.

Support for Small Business

Instant asset write-off: The scheme is extended for another year to 30 June 2025, allowing businesses with turnover under $10 million to deduct the full costs of eligible assets under $20,000.
Workplace Relations: The Government will provide $111.8 million over four years from 2024–25 (and $12.4 million per year ongoing) to support the progression of the Government’s workplace relations agenda. Funding includes $20.5 million over four years from 2024–25 (and $5.1 million per year ongoing) to boost funding for the Office of the Fair Work Ombudsman to support small business employers to comply with recent changes to workplace laws.

The Government will provide $41.7 million over four years from 2024–25 to support small businesses. Funding includes:

Payment times reporting: $25.3 million over four years from 2024–25 to support the Payment Times Reporting Regulator to implement reforms recommended by the statutory review of the Payment Times Reporting Act 2020, including increased resourcing for the Regulator and upgrading the Regulator’s ICT infrastructure.
Small business debt helpline: $10.8 million over two years from 2024–25 to extend the Small Business Debt Helpline and the NewAccess for Small Business Owners program to continue to provide financial counselling and mental health support for small business owners.
Franchise code of conduct: $3 million over two years from 2024–25 to implement the Government’s response to the Review of the Franchising Code of Conduct, including by investigating the feasibility of a licensing model and remaking and updating the Franchising Code of Conduct prior to its expiration in April 2025.
ASBFEO: $2.6 million over four years from 2024–25 (and $0.7 million per year ongoing) for the Australian Small Business and Family Enterprise Ombudsman to support unrepresented small businesses to navigate business-to-business disputes through alternative dispute resolution. This measure builds on the 2023–24 MYEFO measure titled Ensuring Small Businesses are Paid on Time.
eInvoicing: $23.3 million to support increased eInvoicing adoption to improve cash flow, disrupt payment redirection scams and boost productivity for small businesses.

Cost-of-living relief

Power Bill Relief: The Government is providing $3.5 billion in energy bill relief. More than 10 million households will receive energy rebates of $300 and one million small businesses will receive $325 from 1 July 2024.
Commonwealth Rent Assistance: The maximum rates of assistance will be increased by 10%, which will support almost one million households at a cost of $1.9 billion over five years from 2023-24.

Skills and innovation

Apprenticeships: Employers taking on apprentices in priority areas will be eligible for an additional $1,000 ($5,000 in total) to help subsidise costs associated with employing an apprentice. Individual apprentices training in priority areas will be eligible for an additional $2,000 ($5,000 in total) to assist them to undertake and complete their training.
Practical Placement Support Scheme: $427.4 million over four years to provide a $319.50 per week payment for eligible students to undertake workplace training as part of their study. This will support 73,000 students per year.
HELP Loan Indexation Adjustment: Retrospective adjustment to above-trend indexation of student HELP debt. HECS indexation will be indexed to CPI or Wage Price index, whichever is lower.
Tertiary education reform: $1.1 billion over five years to reform the tertiary education system and a further $2.7 billion from 2028-29 to 2034-35. This reform is targeted at achieving the Universities Accord’s target of 80% of the working age population to have a VET or higher education qualification by 2050.
FEE-FREE Uni Ready Courses: $350.3 million to expand access to university enabling and preparation programs through a new FEE-FREE Uni Ready Courses program from 1 January 2025.
Harmonising VET and higher education: $60.5 million over ten years to develop initiatives that break down artificial barriers and harmonise regulatory, governance and qualification arrangements between the higher education and vocational education and training sectors.
Promoting TAFE and VET Pathways: $4.4 million to promote VET among students, parents and teachers, and extending community awareness of FEE-FREE TAFE courses in areas of high skills needs.

Growing the workforce

Parental leave superannuation: $1.1 billion over four years to pay superannuation on government-funded Paid Parental Leave (PPL) from July 2025, as well as an additional 12 per cent superannuation contribution for eligible parents based on their PPL.

Artificial Intelligence

Safe and Responsible AI: The Government will invest $39.9 million over five years to support the adoption and use of artificial intelligence (AI) technology in a safe and responsible manner. It includes $21.6 million over four years for a revised National AI Centre (NAIC) and new AI advisory body, $15.7 million over two years from 2024–25 to support industry analytical capability and coordination of AI policy development, regulation and engagement activities across government, including to review and strengthen existing regulations in the areas of health care, consumer and copyright law; $2.6 million over three years from 2024–25 to respond to AI national security risks.

Housing

Infrastructure: $6.2 billion for new housing investments including $1 billion for state infrastructure needed for homes including sewer, energy and water supply infrastructure.
Housing finance: $1.9 billion in concessional finance for social and affordable housing.
Homelessness: $423.1 million over five years for social housing and homeless services that must be matched by states and territories.
Housing-related skills: $88.8 million will be spent to increase the number of skilled workers in the construction sector through FEE-FREE TAFE places.

Infrastructure & Transport

Infrastructure investment program: Western Sydney will receive a $1.9 billion boost in road expansion investments, including $500 million to facilitate the Stage 2 upgrade of the Mamre Road project and $400 million for the Elizabeth Drive – Priority Sections Upgrade. Additionally, the Government will invest $115 million for the Zero Emission Buses Tranche 1 Infrastructure for the Macquarie Park Depot.
Existing Infrastructure Investment Program: $578.6 million for existing infrastructure projects over 11 years from 2023-24, including $112 million for the M1 Pacific Motorway Extension to Raymond Terrace.
Road maintenance and safety programs: The Government is committed to delivering $1.7 billion for existing road maintenance and safety programs, including the Roads to Recovery Program, Safer Local Roads and Infrastructure Program, and the Black Spot Program.
High-speed train line: The greatly anticipated high-speed train line between Sydney and Newcastle will receive $78.8 million over three years from 2023-24 to deliver a business case for the project.
Intermodal terminal: $5 million will be invested in 2024-25 to develop a business case for an intermodal terminal in Parkes to support the Inland Rail program.
Enabling airport operations: The Government will invest $302.6 million over five years into Sydney’s second international airport to enable operations and provide an additional $53.5 million per year from July 2029 to maintain operations.
Completing Western Sydney Airport: The Government will provide equity to WSA Co Limited to support completing stage one of the new Western Sydney Airport.
Enhancing public transport: $100 million will be invested to improve public transport connectivity for Western Sydney residents with new rapid bus infrastructure.
Extending rail line: $20 million towards planning for an extension of the rail line between the Aerotropolis and Macarthur.
National road safety: The Government will invest $32 million over 6 years on improving the National Road Safety Data Hub and creation of a safety education and awareness campaign.
Active transport: From July 2025, $100 million will be spent to build and upgrade cycleways and walking paths around the country over four years.
Aviation compliance: An initial investment of $10.1 million for reforms to the Sydney Airport Demand Management Compliance Framework, strengthening compliance and enhancing competition, with an additional $1.5 million per year ongoing after the four years.

Defence

Defence investment: A $50.3 billion spend over ten years from 2024–25 (and $7.7 billion per year ongoing) to deliver the 2024 National Defence Strategy and Integrated Investment Program. This will usher in significant defence infrastructure spend over the coming years.

Energy and Environment

Future Made in Australia Fund: the $1.7 billion fund aims at deploying public funds to help viable zero carbon industries. It is designed to attract and enable investment, and encourage the transition to cheaper and cleaner energy.
Production of solar panels: the $1 billon Solar Sunshot subsidies and grants program aims at boosting production of solar panels in Australia. The Australian Renewable Energy Agency will work with industry to design and deliver the Solar Sunshot initiative, along with the Government.
Battery Breakthrough Initiative: the initiative will provide $523.2 million over seven years to target the high-value opportunities in the battery manufacturing.
Mapping of critical minerals: Geoscience Australia will receive $566.1 million over 10 years to map deposits of critical minerals and rare earth needed to develop renewable energy technologies. With an additional average of $111.8 million per year from 2034-35 to 2058-59.
Net Zero Economy Authority: The Government will invest $399.1 million to establish the Authority to support the economy-wide net zero transformation.
Hydrogen Production Tax Incentive: An estimated $6.7 billion in tax breaks over ten years to producers of renewable hydrogen to increase its production for use as fuel and other applications.
Hydrogen Headstart program: An additional $1.3 billion will provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts over the next ten years.
Energy transition: the Government will invest $47.7 million over four years to maximise consumer and community benefits of the energy transition.

Support for Regions

Future Drought Fund: $519.1 million towards programs that help farmers and regional communities prepare for dry conditions and improve their climate resilience.
Upgrading regional airports: $101.9 million is committed to upgrading regional airports and remote airstrips, delivering better connections and more resilient infrastructure for communities, with an additional $0.8 million per year ongoing.
Connectivity: $40 million will be invested to support the rollout of additional community wi-fi in remote and regional Australia.
Water infrastructure: $174.6 million from the National Water Grid Fund to deliver new water infrastructure projects that will enhance water security, boost agricultural production and help drought-proof regional communities.
Healthcare: $227 million to deliver a further 29 Medicare Urgent Care Clinics and boost support for regional and remote clinics.
Jobs growth: $777.4 million over five years from 2023-24 (and a further $255.5 million per year ongoing) to develop local jobs, services and economic opportunities in remote regions.
Skills and employment: $134.2 million over four years for skills and employment support in key regions. With an additional $377.8 million over the following decade and an additional $40.1 million per year ongoing from 2035-36. This includes developing Regional Workforce Transition Plans, negotiated with governments and reflecting the voices of communities, workers, employers and unions, that will support the delivery of place-based services and supports.
Ag Training: $0.5 million over two years from 2024–25 to continue the AgCAREERSTART pilot program for two cohort years to encourage young people to consider a career in agriculture.

Other

Digital ID Scheme: $288.1 million for the Government’s Digital ID scheme, which will reduce the amount of personal information that businesses will need to store. The scheme will be used by banks, credit card providers and Australia Post. This includes $155.6 million over two years from 2024–25 to the Australian Taxation Office (ATO) to continue operating and improving the Government’s Digital ID, myGovID, and the system which supports authorised access to a range of government business services.
Funding for arts schools: $117.2 million in funding over four years and $36.9 million per year ongoing to support the ongoing operations of performing arts organisations, including the Sydney-based Australian Film Television and Radio School.
Audit of Government supply chains & procurement practices: $2.5 million over two years from 2024–25 to the Attorney-General’s Department to undertake an audit of Government supply chains and procurement procedures to tackle modern slavery risks.
Engineered Stone Import Prohibition: The Government will provide $32.1 million over two years from 2024–25 to the Australian Border Force to enforce a legislated import prohibition on engineered stone products entering Australia, to support the state and territory ban on the use, supply, and manufacture of engineered stone which will take effect in most jurisdictions from 1 July 2024, with limited exemptions for certain legacy contracts.

Federal Budget 24/25 Breakdown