At 7:30pm tonight, Jim Chalmers delivered his third budget announcing that “this is a budget for the here and now and its a budget for the decades to come. It’s a responsible budget that helps people under pressure today and invests in the promise and potential of the more prosperous future that we can make together.”
The Treasurer said that the Government’s main priorities are helping with the cost of living, building more homes for Australians, investing in a future made in Australia and the skills and universities we will need to make it a reality, strengthening Medicare and the care economy, and responsible economic management which is set to produce another surplus and help fight inflation.
Key Forecasts
- $9.3B surplus for 2023-24, $28.3B deficit for 2024-25, $42.8B deficit for 2025-26, $26.7B deficit for 2026-27 and $24.3B deficit for 2027-28;
- 1.75% GDP growth for 2023-24, 2% GDP growth for 2024-25, 2.25% GDP growth for 2025-26, 2.5% GDP growth for 2026-27, 2.75% GDP growth for 2027-28;
- Forecast inflation for 2023-24 is 3.5%, 2.75% for 2024-25, 2.75% for 2025-26, 2.5% for 2026-27 and 2027-28;
- $500B net debt for 2023-24, $552.5B net debt for 2024-25, $615.5B net debt for 2025-26, $660B net debt for 2026-27, and $697.5B net debt for 2027-28;
- 4% unemployment is expected for 2023-24, 4.5% for 2024-25, 4.5% for 2025-26, 4.5% for 2026-27, and 4.25% for 2027-28;
- 4% wages growth is expected for 2023-24, 3.25% for 2024-25, 3.25% for 2025-26, 3.5% for 2026-27, and 3.5% for 2027-28.
Key Announcements
The Treasurer said that the number one priority of this budget and this Government is helping Australians with the cost of living and announced the following measures:
- The Government’s previously legislated stage 3 tax cuts have not been changed and will apply from 1 July 2024. These tax cuts reduce the 19% tax rate to 16%, reduce the 32.5% tax rate to 30%, increase the top income threshold of the 30% tax bracket from $120,000 to $135,000, and increase the top income threshold of the 37% tax bracket from $180,000 to $190,000;
- From 1 July 2023, small businesses with annual turnover of $10m or less are able to claim an instant asset write off deduction on the purchase of business assets costing up to $20,000. This benefit has been extended by another 12 months to 30 June 2025;
- From 1 July 2024, all Australian households will receive a rebate of $300 off their energy bills throughout the year;
- From 1 July 2024, eligible small businesses will receive a rebate of $325 off their energy bills throughout the year;
- From 1 July 2024, the Australian paid parental leave scheme will be extended by 2 weeks per year until it reaches 26 weeks from 1 July 2026. Paid parental leave will, therefore, be provided for 22 weeks from 1 July 2024, 24 weeks from 1 July 2025, and 26 weeks from 1 July 2026;
- Superannuation will be provided to parents on paid parental leave for babies born on or after 1 July 2025 with superannuation payments being made annually from 1 July 2026.
The Treasurer said that Labor Governments make Medicare stronger and make medicine cheaper, and announced the following:
- A one year freeze on the maximum $31.60 Pharmaceutical Benefits Scheme patient co-payment for anyone with a Medicare card;
- A five year freeze on the maximum $7.70 Pharmaceutical Benefits Scheme patient co-payment for pensioners and concession card holders;
- Addition of new medicines to the Pharmaceutical Benefits Scheme.
The Treasurer explained that spikes in inflation have exposed a flaw in our student loan system and put young people under unfair pressure. To relieve this pressure, the following was announced resulting in an average saving of $1,200 per person:
- Indexation of student loans will be capped at the lower of the Consumer Price Index and the Wage Price Index and this cap will be backdated to apply from 1 June 2023;
- The 1 June 2023 indexation of 7.1% will reduce to 3.2%.
